PF 6.05 Types Of Insurance Question Preview (ID: 33967)
PF 6.05 Types Of Insurance.
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What is the difference between property and liability insurance?
a) Property insurance pays for loss to the insured person whereas liability insurance pays for loss to other people
b) Property insurance pays for loss to other people whereas liability insurance pays for loss to the insured person
c) The difference between property and liability insurance depends on the specific insurance policy purchased
d) The difference between property and liability insurance depends on whether automobile, homeowners, or renters insurance is p
Which of the following best describes the benefits of having insurance?
a) Insurance combined with emergency savings provides a sense of financial security and peace of mind
b) The policyholder may become better off financially if an accident occurs
c) The policyholder no longer has to worry about paying for financial losses resulting from an accident because all risk of fin
d) It is required by law to purchase insurance so the benefits do not matter
Insurance can be purchased to protect one from which of the following losses?
a) Health care expenses
b) Stock market losses
c) Maintaining the price of your home
d) Car maintenance
Tiffany was recently involved in a vehicle accident. In order to get her car fixed, her insurance company is requiring her to pay the first $500 of the repair bill because:
a) her policy's deductible is $500
b) she did not call her agent and report the accident quickly enough
c) she will be reimbursed by the insurance company later
d) the cost of the repairs is higher than her policy covers
If a person drives an automobile, they are required by law to have Automobile Liability Insurance. In which situation would this type of policy protect the policyholder?
a) James backed into a vehicle in the grocery store parking lot and caused $2000 in damages to his own car and $3000 in damages
b) James hit a deer while driving to work on a foggy morning, killing the deer and causing $2000 in damage to his car.
c) An uninsured driver ran a stoplight, hit James’ car, and caused $2000 in damages to James’ car and $3000 in damage to his ow
d) James car was in the parking lot at work during a severe hailstorm where $2000 damage was done to his vehicle.
Eric has chosen Amanda to be the beneficiary of his life insurance policy. What does this mean for Amanda?
a) Amanda will receive any proceeds if the Eric dies
b) Amanda must pay the insurance premiums to keep the policy in effect.
c) Amanda will receive a commission for selling Eric his life insurance policy.
d) Amanda is required to serve as the executor of Eric’s estate.
Maggie will need to pay $120 per month in order to purchase a health insurance policy. This monthly payment is known as the:
a) premium
b) deductible
c) co‐insurance
d) moral hazard
Patty recently moved into a new apartment with her friend Emma. Who is responsible for purchasing renter’s insurance?
a) Patty and Emma
b) The property manager
c) Patty and Emma’s parents
d) Renters insurance is not necessary
James received his first medical bill of the year. It was a total of $1000. His health insurance policy has a $500 deductible and a 20% co‐insurance. How much of the medical bill will Jade be responsible to pay?
a) $700
b) $0, insurance will cover the entire medical bill
c) $500
d) $600
As part of Nicholas’ new job, his employers will provide health, life, and disability insurance. Access to this insurance is provided in addition to his regular salary. This is known as:
a) employee benefits
b) government programs
c) household production
d) coverage
It is recommended that life insurance be purchased when the:
a) individual has dependents
b) individual reaches the age of 50
c) individual flies in an airplane
d) individual gets their first job
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