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Insurance Answers

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1
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Which is always a cost when buying insurance?

A
premium
B
deductible
C
co-payment
D
payout
2
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How can an insurance company make a profit by taking in premiums and making payouts?

A
The value of the premiums the company takes in is higher than the value of the payouts it makes.
B
The value of the premiums the company takes in is equal to the value of the payouts it makes.
C
The company only makes payouts from a pool of funds, not from individual premiums.
D
The company issues its policies to individuals who are unlikely to require payouts.
3

Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because

A
people are cautious and believe they are less likely to get sick if they have health-insurance coverage.
B
doctors and hospitals always provide better care to people who have health insurance.
C
people still feel more secure with a health insurance policy, even though out-of-pocket costs are often lower.
D
medical costs can be extremely high, and insurance is more affordable than paying out-of-pocket for a hospital stay.
4

Under which circumstance would someone need disability insurance?

A
A person's suitcase was stolen and valuables were lost.
B
A person has contracted the flu and needs a prescription.
C
A person was in a car accident and cannot work for several months.
D
A person's house was seriously damaged during a natural disaster.
5

What must happen in order for an insurance company to make a payout? Check all that apply. The insurance company must verify the claim.The insured party must file a claim.The insured party must purchase property.The insurance policy must be in place.The insured party must experience a covered loss.

A
The insurance company must verify the claim.
B
The insured party must file a claim.
C
The insured party must purchase property.
D
The insurance policy must be in place.
E
The insured party must experience a covered loss.
6

Which type of insurance policy would someone get to protect others only?

A
health insurance
B
life insurance
C
property insurance
D
disability insurance
7

Maria's family has a health insurance plan. Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. The insurance company covered the rest of the cost of the visit.When Maria's mother went to the hospital, her family was responsible for paying the first $1,000 of the bill. After this payment, the insurance company covered the rest of the costs.

A
payout
B
deductible
C
co-payment
D
premium
8

An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. What type of risk management is this an example of?

A
reducing risk.
B
sharing risk.
C
avoiding risk.
D
maximizing risk.
9

Insurance companies create a pool of funds to handle ______

A
risk
B
gain
C
loss
D
safety
10

Why does insurance often provide "peace of mind"?

A
People know their insurance coverage will help prevent accidents and damage.
B
People trust that they will make a profit if they pay insurance premiums.
C
People are not concerned about their health if they can pay for doctor's visits.
D
People are less worried when they know they have protection from risk.
11

sharemoveavoidreplace

A
share
B
move
C
avoid
D
replace
12

Insurance is a financial service that allows a

A
consumer to transfer all risk to a company.
B
company to control finances for a consumer.
C
consumer to share liability with a company.
D
company to maximize risk for a consumer.
13

Roland has purchased a new tablet. How can he reduce the risk of damage or misuse? Choose three correct answers.

A
by using a screen protector
B
by letting his toddler play with it
C
by using an antivirus app
D
by using a protective case
E
by letting his friends borrow it
14

What is an insurance premium?

A
the value of something lost or damaged
B
the highest payout available by an insurer
C
the amount paid for an insurance policy
D
the best type of insurance available
15

The basic purpose of insurance is to provide

A
loans.
B
prevention.
C
protection.
D
liability.
16

What is an insurance premium?

A
the value of something lost or damaged
B
the highest payout available by an insurer
C
the amount paid for an insurance policy
D
the best type of insurance available
17

In what circumstance would a property insurance claim be rejected?

A
The insurance company finds that a homeowner intentionally caused damage.
B
The property damage is caused by a natural disaster, such as a flood.
C
The insurance company changes its policies after property damage occurs.
D
The property damage is extensive and requires lengthy and expensive repairs.
18

Insurance is a financial service that allows a

A
consumer to transfer all risk to a company.
B
company to control finances for a consumer.
C
consumer to share liability with a company.
D
company to maximize risk for a consumer.
19

How can an insurance company make a profit by taking in premiums and making payouts?

A
The value of the premiums the company takes in is higher than the value of the payouts it makes.
B
The value of the premiums the company takes in is equal to the value of the payouts it makes.
C
The company only makes payouts from a pool of funds, not from individual premiums.
D
The company issues its policies to individuals who are unlikely to require payouts.
20

Roland has purchased a new tablet. How can he reduce the risk of damage or misuse? Choose three correct answers.

A
by using a screen protector
B
by letting his toddler play with it
C
by using an antivirus app
D
by using a protective case
E
by letting his friends borrow it

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