About Insurance

There are several types of insurance policies, each of which entails a contract between the insured and an insurance provider. The company pooled the risks of its clients to make payments more reasonable to the insured

Insurance Policies

Insurance plans are used to protect against the risk of large and small financial losses resulting from harm to the insured or his or her property, or from responsibility for damage or injury to a third party.

Features of Insurance

  • Insurance is a contract (usually known as a policy) in which an insurer agrees to reimburse the third party for losses that have been brought on by certain occurrences or risks.
  • There are many different types of insurance coverage. The most prevalent types of insurance are life, health, homeowners, and vehicle.
  • The deductible, premium, and policy limit are the three main components of most insurance contracts.

Types of Insurance Policies

There are many different types of insurance plans to choose from, and almost anybody or any business can find an insurance company prepared to insure them—for a fee. Auto, homeowners, health, and life are the most frequent forms of personal insurance plans. Car insurance is required by law in the United States, and most people have at least one of these forms of insurance.

Businesses require specialized sorts of insurance plans that protect them against distinct dangers. A fast-food restaurant, for example, needs a policy for damage or injury resulting from deep-frying operations. A car dealer is not exposed to this kind of risk, but they are required to have insurance coverage in case a customer is injured or damaged when test driving a vehicle.

Following are some of the multiple choice questions on the Insurance with answers that will help the students in developing their knowledge.

Insurance MCQ

1. Which of the following typically have the highest insurance premiums.

  • Young, inexperienced drivers
  • Older, experienced drivers
  • Drivers who have with safe driving records
  • Drivers who travel long distances

2. According to the Affordable Care Act, children can be on their parents' health insurance until what age?

  • Until they get a full time job
  • 22
  • 26
  • 28

3. _________ _________ insurance is a combination of a life insurance policy & a savings acct; it covers the insured for his or her lifetime and any amt the insured pays over the minimum premium goes into an investment acct that earns interest

  • traditional plan
  • whole life
  • term life
  • universal life

4. ________ ___________ __________ is a whole life insurance policy that is paid up after a specified number of years, or until the insured reaches a certain age, but offers lifetime protection

  • health maintenance organization
  • preferred provider organization
  • limited payment policy
  • cash value

5. _______ _______ is the amount of money you will receive if you cancel your whole life insurance policy

  • deductible
  • medical
  • term life
  • cash value

6. _______ _________ insurance also known as permanent life insurance, offers financial protection for your entire life

  • term life
  • whole life
  • universal life
  • life

7. __________ insurance is financial protection for a family in case the main source of income dies

  • life
  • term
  • medical
  • health

8. A(n) _________ is the amount of money you must pay each year before your insurance company starts paying

  • life
  • beneficiary
  • deductible
  • health

9. What does renters insurance cover?

  • The damage to the property
  • Earthquakes
  • Personal items the tenant owns
  • If a burglar breaks in and he/she is injured as a result

10. This type of insurance protects against damage to the car OR injury to persons in the car caused by a driver who carries no insurance.

  • collision
  • comprehensive
  • property
  • uninsured motorists

11. If you can not work due to a health condition or injury, this type of insurance will pay you a portion of the income you lose.

  • disability
  • health
  • premium
  • hospitalization

12. What type of insurance coverage is considered specialized?

  • Floods and earthquakes
  • Stolen or destroyed property
  • Loss of Use
  • Property Damage from a fire

13. Which type of Life Insurance policy only pays a beneficiary when a person dies during a time period?

  • Term Life Insurance
  • Whole Life Insurance
  • Variable Life Insurance
  • Universal Life Insurance

14. Which of the following is NOT covered by Property Damage Liability Coverage?

  • Cars
  • Poles
  • Signs
  • Medical Bills

15. Insurance that protects your family against financial loss due to your death is

  • coinsurance
  • disability insurance
  • life insurance
  • comprehensive insurance

16. Surgical insurance covers the fees of

  • teachers who teach
  • professors who instruct
  • truck drivers who drive
  • doctors who perform surgery

17. Which of the following is a way to reduce the cost of your insurance premium?

  • Good grades
  • Number of miles you drive
  • Where you live
  • All answers are correct

18. The total cost of buying insurance, usually per year

  • Premium
  • coverage
  • deductible
  • policy

19. What year was Obamacare made?

  • 2018
  • 2010
  • 2008
  • 2016

20. A type of car insurance that covers damage to your OWN motor vehicle is

  • collision
  • comprehensive
  • bodily injury
  • uninsured motorist

21. Of the four parts of auto insurance coverage, which part protects your from acts of God?

  • Comprehensive
  • Liability
  • Collision
  • Medical Payments/Bodily Injury

22. The purpose of insurance is to completely transfer risk to other people.

  • TRUE
  • FALSE

23. Requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid

  • employee benefits
  • co-insurance
  • deductible
  • coverage

24. The risks covered and amount of money paid for losses under an insurance policy

  • emergency savings
  • beneficiary
  • claim
  • coverage

25. Cash set aside that can be used to cover the costs of unexpected expenses

  • emergency savings
  • emergency spending
  • emergency fraud
  • emergency share

26. When you shop for life insurance, you should consider only the cost or premium you will pay.

  • TRUE
  • FALSE

27. Most experts in personal finance say that everyone should have life insurance no matter what age you are.

  • TRUE
  • FALSE

28. In which of the following scenarios will you obligated to pay the least amount of money out-­‐of-­‐pocket for medical expenses?

  • You have no insurance.
  • You have health insurance with a $500 deductible.
  • You have auto insurance with a $700 deductible.
  • You have health insurance with a $1,500 deductible.

29. The amount paid for insurance is the

  • closing cost
  • premium
  • deductible
  • assessed value

30. You fall off your bike and sprain your wrist.

  • Disability Insurance
  • Automobile Insurance
  • Health Insurance
  • Life Insurance

31. After your knee surgery, you are unable to work for 3 months and you need help paying expenses while you're out of work

  • Disability Insurance
  • Health Insurance
  • Life Insurance
  • Automobile Insurance

32. Your car is totaled during a hit and run accident

  • Uninsured Motorist Insurance
  • Life Insurance
  • Comprehensive Insurance
  • Collision Insurance

33. Food poisoning sends you and your family to the emergency room.

  • Liability Insurance
  • Disability Insurance
  • Life Insurance
  • Health Insurance

34. You hit a deer with your car and it needs to be repaired

  • Liability Insurance
  • Comprehensive Insurance
  • Collision Insurance
  • Life Insurance

35. Someone breaks into your apartment and steals your iPad.

  • Homeowners Insurance
  • Liability Insurance
  • Comprehensive Insurance
  • Renters Insurance

36. You crash your car into another vehicle and hurt someone else in the car

  • Bodily Injury Liability
  • Property Damage Liability
  • Collision Insurance
  • Comprehensive Insurance

37. You have a $20 copay every time you go to the doctor. You have a $250 deductible, and a $1000 annual premium for health care. How much money do you have to pay out of pocket before insurance kicks in?

  • $20
  • $100
  • $250
  • $1000

38. Which is NOT a source of Disability Income?

  • Worker's Compensation
  • Private Insurance
  • Social Security
  • University

39. The sprinkler system in your house goes off and it damages the flooring

  • Renters Insurance
  • Homeowners Insurance
  • Umbrella Policy
  • Disability Insurance

40. An unexpected death of a family member occurs and results in funeral expenses

  • Long-term care Insurance
  • Disability Insurance
  • Life Insurance
  • Liability Insurance

41. Your house is destroyed by a tornado and you need to rebuild it.

  • Homeowners Insurance
  • Renters Insurance
  • Life Insurance
  • Liability Insurance

42. _______ ________ insurance is for a specified term, such as 5 years, or to a specified age

  • universal life
  • term life
  • cash value
  • whole life

43. The __________ is the person who receives money from a life insurance policy if the insured dies

  • beneficiary
  • life
  • deductible
  • health

44. _______________ requires you to pay either a set amount or a certain percent of medical expenses

  • co-insurance
  • co-payment
  • life term
  • term life

45. A(n) ____________ is a predetermined flat fee you pay for health care services

  • co-insurance
  • whole life
  • co-payment
  • term

46. _____________ ___________ __________ is a prepaid health plan in which care providers contract with (or are) employees of the org. to provide you with services

  • preferred provider organization
  • health maintenance organization
  • life insurance
  • non-life insurance

47. __________ ___________ __________ is a group of selected health care providers who offer comprehensive services at preset reimbursement levels

  • health maintenance organization
  • co-payment
  • preferred provider organization
  • co-insurance

48. ___________ ______________offers health care coverage where the health care provider is paid a predetermined dollar amount for the service given

  • term life
  • whole life
  • cash value
  • traditional plan

49. ______________ insurance provides financial protection against overwhelming medical expenses

  • Health
  • Car
  • Comprehensive
  • Medical

50. Another name for this type of insurance is a warranty

  • Product insurance
  • Health insurance
  • Life Insurance
  • Home Insurance

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