Financial Planning Courses: Insurance and Risk Management

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It is possible to determine the mathematical probability of risk occurring and the financial risk at stake.

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True

False

True. This is what insurance actuaries do. The results of their calculations are factored into the premiums you pay.

Financial risks can be caused by _______.

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Accidents

Lawsuits

Disability

Any of the above

Any of the above. Anything unexpected that has an adverse effect on your financial goals is financial risk.

Which of the following is false?

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An insurance policy is a legal contract.

In risk management, you should only buy insurance to cover amounts "at risk."

You can save money by buying only benefits and riders you need.

You should always insure property against loss.

You should always insure property against loss. You should only insure property for losses you cannot afford.

Insurance can help you manage _______.

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Risk

Financial loss due to risk

Both of the above

Financial loss due to risk. Insurance is not designed to help you manage risk itself, but rather the financial losses caused by risk.

If you injure yourself at work and become unable to perform your duties, what form of insurance is designed to pay you benefits for a certain length of time?

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Work insurance

Life insurance

Disability insurance

Health insurance

Disability insurance. Disability insurance provides financial benefits if you should become unable to work due to a disabling illness or injury.

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