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Financial Planning Courses: Insurance and Risk Management

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1.
Insurance is used to manage what?
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Financial risk. Insurance is not made to manage the other options. Its purpose is to manage the financial risks that we suffer.
2.
An insurance deductible amount is an example of _______.
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Sharing risk. By sharing risk with an insurer through a co-pay or deductible amount, you can lower your insurance premiums.
3.
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.
4.
Anything _______ that has an adverse effect on your financial goals is financial risk.
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Unexpected. Financial risk involves events that are unexpected.
5.
The best way to shop for insurance is to buy a policy with the lowest premium.
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False. The premium reflects the benefits offered, so a low-cost policy may not have the same benefits of a higher-premium policy.