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Financial Planning Courses: Insurance and Risk Management

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1.
The best way to shop for insurance is to buy a policy with the lowest premium.
Choose wisely. There is only one correct answer.
False. The premium reflects the benefits offered, so a low-cost policy may not have the same benefits of a higher-premium policy.
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.
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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Disability insurance. Disability insurance provides financial benefits if you should become unable to work due to a disabling illness or injury.
4.
Insurance is used to manage what?
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Financial risk. Insurance is not made to manage the other options. Its purpose is to manage the financial risks that we suffer.
5.
It is possible to eliminate all risk in personal finance.
Choose wisely. There is only one correct answer.
False. Though it is possible to minimize it, no one has yet succeeded in eliminating risk entirely.