Financial Planning Courses: Insurance and Risk Management

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1.
To find out what is not covered under an insurance policy, you should consult the exclusions section.
Choose wisely. There is only one correct answer.
True. The exclusions section lists what the policy will not cover.
2.
Liability insurance would cover a situation where another person sued you.
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True. This is the purpose of liability insurance.
3.
Premiums for insurance are based partly upon the likelihood of a negative event occurring.
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True. That likelihood, as well as other factors such as the amount of benefits to be paid, determine the premiums you must pay for the insurance.
4.
Which of the following is a way to manage risk?
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All of the above. Risk is all around us, and we manage it by assuming it, avoiding it, sharing it, or transferring it to someone else.
5.
It is possible to eliminate all risk in personal finance.
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False. Though it is possible to minimize it, no one has yet succeeded in eliminating risk entirely.