Personal finance ch 10-12 study

Understanding and managing risks can Blank______. Multiple choice question. help you to provide better protection for you and your family help you to cover all the risks for you and your family help you to avoid expenditures on insurance premiums help you to avoid accidents that cause financial harm

help you to provide better protection for you and your family

Examples of the risk reduction technique of risk management include Blank______. Multiple select question. installing smoke alarms purchasing insurance wearing seat belts in a car not driving a car

installing smoke alarms wearing seat belts in a car

A household ________is a list or other documentation of personal belongings, with purchase dates and cost information.

inventory

Which of the following best defines homeowner's insurance? Multiple choice question. coverage for all risks that you take as long as you own a home coverage for your residence and its financial risks coverage for loss of income from disability and premature death that occurs at home coverage of all risks related to your residence and apartments that you rent

coverage for your residence and its financial risks

The connection between managing risks and maximizing your success can be best described by which of the following statements? Multiple choice question. By reducing risks, you can maximize your returns from such activities as investing and gambling. By giving into risky behavior and making sure you have some insurance, you can maximize your financial success. Reducing risks and, therefore, financial loss improves your chances for economic, social, physical, and emotional well-being. By reducing risks, you can increase your income from a variety of activities including your job and investing.

- Reducing risks and, therefore, financial loss improves your chances for economic, social, physical, and emotional well-being.

Which of the following financial losses can you insure against? Multiple select question. catastrophic illness personal and property damage when driving loss of home or belongings losses when gambling at a casino

-catastrophic illness - personal and property - damage when driving - loss of home or belongings

Which of the following are possible limits to the coverage for additional living expenses in a homeowner's insurance policy? Multiple select question. full cost of temporary living expenses up to five years 50% of your annual salary for up to nine months 10% to 20% of the home's coverage full cost of temporary living expenses up to a year

10% to 20% of the home's coverage full cost of temporary living expenses up to a year

For a couple, the financial impact of death includes loss of one , loss of services, and final burial .

Blank 1: income, earnings, wages, or salary Blank 2: expenses or costs

Which of the following risks are covered by homeowner's insurance?

Coverage for the financial risks associated with injuries to others Coverage for your place of residence Coverage for the financial risks of damage to personal property

Speculated Risk

a risk that comes with either a loss or a gain

The financial impact of disability includes which of the following? Multiple select question. Final expenses Loss of services Increased expenses Loss of income

Loss of services Increased expenses Loss of income

Which of the following are examples of the risk reduction technique of risk management?

Quitting smoking Wearing seat belts

Which of the following strategies help reduce the financial impact of death? Multiple select question. Medicare and Medicaid Social Security survivor benefits estate planning health-enhancing behaviors life insurance

Social Security survivor benefits estate planning life insurance

Deciding not to buy collision insurance on your car is risk

assumption

Choosing never to sky-dive is an example of risk

avoidance

Which of the following are general risk management techniques?

avoidance reduction assumption

The four risk management methods (presented in the text) include risk:

blank 1: avoidance Blank 2: reduction Blank 3: assumption Blank 4: shifting

The main types of risks related to a home and an automobile are Blank______. Multiple select question. damage or loss to your property your responsibility for injuries to others your responsibility for damage to the property of others the loss of income due to disability the loss of income due to premature death

damage or loss to your property your responsibility for injuries to others your responsibility for damage to the property of others

Which of these strategies help reduce the financial impact of a disability? Multiple select question. drawing upon savings and investments during your disability collecting disability income from a disability insurance policy practicing health-enhancing behaviors using Medicare and Medicaid collecting Social Security disability income

drawing upon savings and investments during your disability collecting disability income from a disability insurance policy collecting Social Security disability income

People's risk management needs typically remain unchanged throughout their lives.

false

is the legal responsibility for the financial loss due to injuries to others or damage to property for which you are responsible.

liability

Hazards increase the likelihood of a(n) ______through a peril.

loss, accident, injury

The goals of insurance include: Multiple select question. minimizing personal risks. minimizing the likelihood of perils. minimizing liability risks. maximizing investment return. minimizing property risks.

minimizing personal risks. minimizing liability risks. minimizing property risks.

Personal risks are uncertainties surrounding loss of income or life due to ______.

old age disability illness unemployment

A deductible is a set amount that the policyholder must pay Blank______ on an insurance policy.

per loss

Shifting of risk is done through the purchase of an insurance ______from an insurance company.

policy

Automobile insurance covers _____ and personal damage (bodily injury) caused by the policyholder's car.

property

The goals of insurance include minimizing personal, _____ and liability risks.

property

Personal risk, property risk, and liability risk are called _______ risk since there would be a chance of loss only if the specified events occurred.

pure or insurable

When there is only a chance for loss if a specified event occurs, a risk is called ______.

pure risk

Which of the following are examples of the risk reduction technique of risk management?

quitting smoking and wearing a seatbelt

A deductible is a combination of which of the following two risk management methods? Multiple select question. risk shifting risk avoidance risk assumption risk reduction

risk assumption and shifting

Which of the following are risk assumption actions? Multiple select question. self-insuring wearing a seat belt installing smoke detectors in all rooms deciding not to purchase collision insurance

self-insuring deciding not to purchase collision insurance

Life insurance replaces income lost when the policyholder dies.

true

Physical damage to a property is caused by hazards such as fire, wind, water, and smoke.

true

Risk management is a long-range financial planning process that helps reduce financial losses caused by destructive events.

true

Self-insurance is a risk assumption strategy that requires the establishment of a monetary fund to cover the cost of a loss.

true

When we make a decision to assume risk, we are essentially self-insuring.

true

What type of policy supplements your basic personal liability coverage and provides protection for injury claims? Multiple choice question. extra liability policy umbrella policy remediation policy basic supplement

umbrella policy