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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.
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True. The exclusions section lists what the policy will not cover.
2.
Insurance protects a person from risks.
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False. Insurance cannot protect a person from risk; instead, it protects a person from financial losses caused by risks.
3.
The more risk you transfer to an insurance company, the _______ your premiums will be.
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Higher. Premiums will rise to compensate the insurance company for taking on your risk.
4.
Life insurance places a value on a person's _______.
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Earning ability. The purpose of life insurance is to pay benefits that replace one's lost earnings ability if one dies.
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.