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Financial Planning Courses: Insurance and Risk Management

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1.
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?
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Credit insurance. Credit insurance is made for scenarios like this.
2.
When you compare two insurance policies, the one with the higher premium is always better.
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False. A more expensive policy may not be better (or worse) than a less expensive one. They may provide different benefits.
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.
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.
5.
It is possible to eliminate all risk in personal finance.
Choose wisely. There is only one correct answer.
False. Though it is possible to minimize it, no one has yet succeeded in eliminating risk entirely.