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Financial Planning Courses: Insurance and Risk Management

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1.
If you live in an apartment, what form of insurance would cover your belongings?
Choose wisely. There is only one correct answer.
Renter's insurance. Renter's insurance is for those who rent homes, such as apartments.
2.
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.
3.
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.
4.
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.
5.
Which of the following is true?
Choose wisely. There is only one correct answer.
Neither is true. In managing risk, you should buy only the amount of insurance necessary to cover a risk you cannot afford. The premium reflects the benefits, so a low-cost policy may not have the same benefits of a higher-premium policy.