AnswersAISD Economics 2026-27The Business Cycle

Insurance Answers

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In what way does a deductible help an insurance company?

A
It adds to the company’s pool of funds.
B
It increases consumers' insurance premiums.
C
It lowers the payout the company has to make.
D
It reduces consumers' co-payments.
2
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An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. What type of risk management is this an example of?

A
reducing risk.
B
sharing risk.
C
avoiding risk.
D
maximizing risk.
3

When an insurance company needs to provide a payout, the money is removed from

A
the consumer’s income.
B
a bank loan.
C
a pool of funds.
D
the consumer’s account.
4

Which is always a cost when buying insurance?

A
premium
B
deductible
C
co-payment
D
payout
5

Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because

A
people are cautious and believe they are less likely to get sick if they have health-insurance coverage.
B
doctors and hospitals always provide better care to people who have health insurance.
C
people still feel more secure with a health insurance policy, even though out-of-pocket costs are often lower.
D
medical costs can be extremely high, and insurance is more affordable than paying out-of-pocket for a hospital stay.
6

Maria's family has a health insurance plan. Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. The insurance company covered the rest of the cost of the visit.When Maria's mother went to the hospital, her family was responsible for paying the first $1,000 of the bill. After this payment, the insurance company covered the rest of the costs.

A
payout
B
deductible
C
co-payment
D
premium
7

What is an insurance premium?

A
the value of something lost or damaged
B
the highest payout available by an insurer
C
the amount paid for an insurance policy
D
the best type of insurance available
8

Why does insurance often provide "peace of mind"?

A
People know their insurance coverage will help prevent accidents and damage.
B
People trust that they will make a profit if they pay insurance premiums.
C
People are not concerned about their health if they can pay for doctor's visits.
D
People are less worried when they know they have protection from risk.
9

Insurance is a financial service that allows a

A
consumer to transfer all risk to a company.
B
company to control finances for a consumer.
C
consumer to share liability with a company.
D
company to maximize risk for a consumer.
10

In what circumstance would a property insurance claim be rejected?

A
The insurance company finds that a homeowner intentionally caused damage.
B
The property damage is caused by a natural disaster, such as a flood.
C
The insurance company changes its policies after property damage occurs.
D
The property damage is extensive and requires lengthy and expensive repairs.

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