banking and finance - insurance

1. Losses due to shoplifting are passed on to consumers through higher prices. True or false?

True.

2. All drivers must have bodily injury liability insurance. True or false?

False as a universal claim; requirements vary by state. Check your course answer.

3. Personal risk is economic risk associated with damage to or loss of property. True or false?

False. This describes property risk.

4. Health insurance policies usually include dental, vision, or mental health care. True or false?

Likely False in this textbook. Wording is ambiguous: mental health is covered by Marketplace plans, while adult dental and vision are often separate.

5. Economic risk is the threat of a loss with no opportunity for gain. True or false?

False. This defines pure risk.

6. You can practice risk reduction by following safety rules. True or false?

True.

7. Vehicle insurance laws are federal and uniform throughout the continental United States. True or false?

False. Requirements vary by state.

8. A life insurance policy may not have more than one beneficiary. True or false?

False. Multiple beneficiaries are allowed.

9. You cannot eliminate all risk, but you can reduce and manage it. True or false?

True.

10. Part of a cash-value insurance premium pays for death benefits, and the rest builds cash value like savings. True or false?

True in the simplified textbook description; policy expenses also use part of the premium.

11. Property damage liability insurance covers damage to the policyholder's vehicle. True or false?

False. It covers damage to others' property.

12. The two types of property you can insure are real property and personal property. True or false?

True.

13. For most people, the most expensive form of health insurance is group health insurance. True or false?

False.

14. Wearing a seat belt is an example of what risk-management method?

Risk reduction.

15. Terrorism is considered what kind of risk in this quiz?

Natural risk — course answer supplied by you.

16. Buying insurance protection is an example of what?

Risk transfer.

17. What is a person who receives proceeds from an insurance policy called?

A beneficiary.

18. What is a rider to a policy?

An addition to cover specific property or damages.

19. Which listed option does liability insurance cover: carpal tunnel syndrome, accidents, death benefits, or health benefits?

Accidents — covered harm for which the insured is legally responsible.

20. Renters insurance covers loss to what?

Personal belongings in the apartment.

21. Which listed factor affects life insurance cost?

The number of years a person will pay premiums.

23. What is the price a person pays for insurance protection called?

The premium.

24. What type of life insurance generally has the same premium throughout the insured's lifetime?

Whole life.

25. What insurance covers injuries you cause to someone else?

Bodily injury liability insurance.

26. What type of property is a house?

Real property.

27. What does replacement value refer to?

The cost of repairing or replacing property that was destroyed or damaged.

28. What insurance provides savings and a death benefit?

Cash-value insurance.

29. In this quiz, rental-car insurance would fall under what policy provision?

Likely miscellaneous coverage; confirm with your textbook because actual rental-car coverage depends on policy terms.

30. With otherwise comparable applicants buying the same life policy, who likely pays the highest premium: a 30-, 40-, 50-, or 60-year-old?

A 60-year-old.

31. With variable life insurance, what is cash value used for?

Investments such as stocks and bonds.

32. What is the defining feature of term life insurance?

It exists for a specific period. The listed answer that it is less expensive than whole life is also generally true for comparable initial coverage.

33. What may health-care costs include?

Coinsurance and copayments.

34. What does a financial responsibility law require of drivers?

Financial responsibility for damages or injuries they cause in an accident.

36. Which statement about people, businesses, and risk is most true?

All people and businesses make decisions that create risk.

37. In no-fault insurance claims, who pays covered injury benefits to injured drivers?

Their own insurance company.

38. What is the best listed example of an insurable risk?

Someone with a good driving record seeking insurance for a car noted for its safety features.

39. What is a deductible?

An amount a policyholder must pay before the insurance company pays a covered claim; details vary by coverage.