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Financial Planning Courses: Insurance and Risk Management

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1.
Insurance can help you manage _______.
Choose wisely. There is only one correct answer.
Financial loss due to risk. Insurance is not designed to help you manage risk itself, but rather the financial losses caused by risk.
2.
Insurance is used to manage what?
Choose wisely. There is only one correct answer.
Financial risk. Insurance is not made to manage the other options. Its purpose is to manage the financial risks that we suffer.
3.
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.
4.
Life insurance places a value on a person's _______.
Choose wisely. There is only one correct answer.
Earning ability. The purpose of life insurance is to pay benefits that replace one's lost earnings ability if one dies.
5.
If you take out a loan and then lose your job shortly afterward, what form of insurance would protect you financially if you default on your loan?
Choose wisely. There is only one correct answer.
Credit insurance. Credit insurance is made for scenarios like this.