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Financial Planning Courses: Insurance and Risk Management

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1.
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.
2.
You should only insure property for losses you cannot afford.
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True. Unless you want to deliberately waste money on premiums, you should determine how much financial loss you can afford, then insure only that which you cannot afford. This will help you keep your premiums as low as possible.
3.
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.
4.
What form of insurance would pay for the costs of assisted living?
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Long-term care insurance. This form on insurance covers costs of caring for you over a long period.
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.