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Financial Planning Courses: Insurance and Risk Management

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1.
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.
2.
Financial risks can be caused by _______.
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Any of the above. Anything unexpected that has an adverse effect on your financial goals is financial risk.
3.
What form of insurance would pay for the costs of assisted living?
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Long-term care insurance. This form on insurance covers costs of caring for you over a long period.
4.
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.
5.
Premiums for insurance are based partly upon the likelihood of a negative event occurring.
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True. That likelihood, as well as other factors such as the amount of benefits to be paid, determine the premiums you must pay for the insurance.