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Financial Planning Courses: Insurance and Risk Management

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1.
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.
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.
Underestimating the amount of insurance coverage you need can result in _______.
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Very large out-of-pocket expenses. This is why it is necessary to estimate your insurance coverage accurately.
4.
Liability insurance would cover a situation where another person sued you.
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True. This is the purpose of liability insurance.
5.
Insurance can help you manage _______.
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Financial loss due to risk. Insurance is not designed to help you manage risk itself, but rather the financial losses caused by risk.