Personal Financial Literacy

What is the primary purpose of health insurance?

• To cover routine medical expenses

• To protect against major medical expenses

• To provide guaranteed income after retirement

• To eliminate out-of-pocket healthcare costs

Which component of health insurance is a fixed amount you pay for each doctor visit or prescription?

• Premium

• Deductible

• Co-pay

• Coverage limit

What is the main difference between collision and comprehensive auto insurance?

• Collision covers repairs for theft; comprehensive does not.

• Collision covers damages from accidents; comprehensive covers non-collision damages.

• Collision insurance is required by law; comprehensive insurance is not.

• Comprehensive covers damages to others’ property; collision does not.

In Texas, what is the minimum required coverage for bodily injury liability per person?

Why is liability insurance often considered the most important part of an auto insurance policy?

• It pays for your car’s repairs after an accident.

• It covers legal expenses if you are sued.

• It protects against claims for damages caused to others.

• It pays for damages to your car from natural disasters.

What is the main advantage of renter’s insurance over homeowners insurance?

• It is less expensive and only covers personal belongings.

• It covers the structure of the home and personal property.

• It includes liability coverage for accidents in the home.

• It covers property damages caused by earthquakes.

Which type of life insurance is typically more affordable and provides coverage for a set period?

• Term life insurance

• Whole life insurance

How does a deductible affect the cost of an insurance policy?

• A higher deductible lowers monthly premiums.

• A higher deductible increases the amount covered.

• A lower deductible decreases the need for coverage.

• A lower deductible increases the chance of claims being denied.

What is the purpose of comprehensive auto insurance?

• To cover repairs for damages from accidents.

• To pay for medical expenses after an accident.

• To cover theft, fire, vandalism, or natural disasters.

• To replace your car after a total loss.

What is the primary purpose of a credit score?

• To calculate the total amount of debt a person owes

• To determine a borrower’s likelihood of repaying debt

• To decide how much income a borrower can keep after taxes

• To establish the minimum interest rate for a loan