Understanding Insurance

What is the main purpose of insurance?

• To save money for a vacation

• To avoid paying taxes

• To make you pay more money

• To transfer risk from you to the insurance company

What is a premium?

• The money you save in a bank

• The total cost of all your expenses

• The amount of money you receive from the insurance company

• The amount of money you pay for an insurance policy

What is a deductible?

• The fee you pay to cancel your insurance

• The bonus you get for not filing a claim

• The total amount of your insurance coverage

• The amount you pay out of pocket before insurance covers the rest

What is a claim?

• A formal request for payment from the insurance company

• A type of insurance policy

• A discount on your premium

• A penalty for late payment

What is a grace period?

• The time after the premium is due when you can still pay without losing coverage

• The time when your insurance policy is inactive

• The time you have to wait before filing a claim

• The period when you don't have to pay premiums

What is a copay?

• A payment you make each time you get medical service

• The total cost of your insurance policy

• The amount you pay for car repairs

• The fee for changing your insurance provider

How can you save on insurance?

• By raising your deductible

• By ignoring your insurance policy

• By paying your premiums late

• By filing more claims

What is the out-of-pocket maximum?

• The total amount of your insurance coverage

• The most you have to spend for covered services in a year

• The amount you pay for each claim

• The fee for renewing your policy

Why is insurance important in a financial plan?

• It makes you spend more money

• It allows you to avoid all risks

• It guarantees you will never have expenses

• It helps cover big costs when unexpected things happen

What is coverage in an insurance policy?

• The amount you pay for your premium

• The fee for filing a claim

• The total cost of your insurance policy

• The amount of money the insurance company agrees to pay for an incident