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Financial Planning Courses: Insurance and Risk Management

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1.
The more risk you transfer to an insurance company, the _______ your premiums will be.
Choose wisely. There is only one correct answer.
Higher. Premiums will rise to compensate the insurance company for taking on your risk.
2.
There are many ways to manage risks in your financial life. For example, not taking any steps at all to reduce the risk of financial loss is called _______.
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Assuming risk. In this scenario, you assume the risk yourself, along with having to pay for the financial consequences.
3.
Anything _______ that has an adverse effect on your financial goals is financial risk.
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Unexpected. Financial risk involves events that are unexpected.
4.
When you compare two insurance policies, the one with the higher premium is always better.
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False. A more expensive policy may not be better (or worse) than a less expensive one. They may provide different benefits.
5.
Liability insurance would cover a situation where another person sued you.
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True. This is the purpose of liability insurance.