How Much Do You Know About Insurance?

1. Risk is best defined as:

The chance of loss

The chance of harm

The chance of loss or harm

None of these

Correct!

Wrong!

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2. An example of a risk associated with a skateboard is:

Falling off and breaking your arm

Hitting a pothole on the sidewalk and breaking your skateboard in half

Both a and b

None of these

Correct!

Wrong!

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3. Which of the following cannot be classified as an unexpected event that puts people at risk?

Tornado

Car accident

Illness

All of these

Correct!

Wrong!

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4. To protect yourself from unexpected losses caused by risk, you should:

Use your credit card to cover everyday expenses

Create a savings account

Purchase Pokemon cards and sell them off when you need money

Chill out! You can always get a loan from a friend or family member

Correct!

Wrong!

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5. You are at risk for personal financial damage when:

Unexpected events can damage your income or wealth

Unexpected events can damage your property

Unexpected events can damage your health

All of these

Correct!

Wrong!

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6. Insurance is best described as:

A product that can be secured to transfer risk or loss to a third party

A product that will pay you millions if you crash your car

A product that will pay you millions if you crash your motorycycle

All of these

Correct!

Wrong!

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7. An insurance premium is:

A fee you pay to the doctor for coverage

A fee you pay to the insurance provider for coverage

A fee you pay to the hospital for coverage

None of these

Correct!

Wrong!

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8. An insurance claim is:

A verbal request

A complaint made to the Federal Trade Commission about insurance company

A written request made to the insurance company for payment of a service that is not covered under the provisions of the plan

Correct!

Wrong!

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9. How do insurance companies raise money to pay out claims?

By investing the owner's money in stocks

By pooling funds collected by premiums

By investing the owner's money in bonds

By soliciting or asking for donations online

Correct!

Wrong!

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10. Which of the following best describes the relationship between risk and insurance premiums?

The higher the risk, the lower the premium

The lower the risk, the higher the premium

The lower the risk, the lower the premium

There is no relationship

Correct!

Wrong!

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11. You can potentially lower insurance premiums by:

Shopping around with different providers

Enrolling in a safe-driver course

Asking for a discount

All of these

Correct!

Wrong!

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12. Which of the following is not a type of insurance?

Life insurance

Disability insurance

Tattoo insurance

Property and casualty insurance

Correct!

Wrong!

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