1. A good way to reduce the cost of your car, home, and health insurance is to:
a. Raise the deductibles on your policies
b. Reduce your coverage to the minimum
c. Keep your auto and home policies with different companies
d. Suspend your coverage for a limited time
2. The four documents you must have to protect your family are:
a. A will, an irrevocable trust, an advance directive, and a durable power of attorney
b. A will, a living revocable trust, a durable power of attorney, and an advance directive
c. A prenuptial agreement, a will, a bypass trust, and a living will
d. An emergency information form, a will, a living revocable trust, and an advanced directive
3. If your income drops and you can no longer afford private school for your children, you should:
a. Put your family first by reducing retirement contributions and using the money to pay for
tuition for your children
b. Use your emergency savings to cover tuition until your income increases
c. Consider moving your child to a good public school, even if you have to move to a different
community
d. Apply for a private education loan at your bank or credit union
4. When you have a will what is the name of the court procedure that the will has to go through
before assets are giving to the beneficiaries?
a. Beneficiaries court
b. Death court
c. Probate court
d. Estate court
5. What is an advance directive?
a. A document that clearly spells out the level of medical intervention you want in the event
you become too ill to speak for yourself.
b. A document that specifies where your assets will go upon your death.
c. A document that specifies who will make decisions for your children should you pass
away while they are still minors.
d. A document that specifies who the executor of your will be.
6. In which of the following accounts can you not designate beneficiaries?
a. Life insurance policy
b. 401(k) retirement account
c. Pay of Death accounts
d. Credit-card accounts
7. Why should you never designate minor children as your primary beneficiary, but instead put
assets intended for them into a trust?
a. Because they cannot be trusted to manage their own money.
b. Because their guardians will likely mismanage the funds.
c.Because minors cannot legally inherit money.
d. Because the money will be held in probate court for over a year.
8. Life insurance is meant to:
a. Be the most cost-effective way to protect you and your loved ones for your entire life and
after your death.
b. Provide a vehicle for investing, in addition to insuring your life and protecting those who
are financially dependent on you.
Week 3 Quiz
c. Protect those who are financially dependent on you should you pass away before you
have had time to build your assets.
d. Be a cost effective-way to pay money to your beneficiaries without having to pay any
income tax on the death benefit.
9. You do not need to purchase life insurance if:
a. You are a stay-at-home mom.
b. Your loved ones would be able to take care of themselves if you died tomorrow.
c. You have free coverage as part of your benefits plan at work.
d. You are married and your spouse works.
10. What is the main benefit of term insurance over other types of life insurance?
a. It builds cash value.
b. It is inexpensive, which means you can afford to purchase coverage adequate to your
needs.
c. It protects you and your family for the most vulnerable term or years of your life.
d. It covers you for your entire life.
11. When purchasing life insurance, you should look for a death benefit that is:
a. Equal to 20- to 25- times your annual financial needs.
b. Equal to 8 months of living expenses.
c. Equal to $1 million times the number of beneficiaries.
d. Equal to the value of your house and car loans and all outstanding debts so they can be
paid off in full should you pass away.
12. In general, how long should you carry insurance to protect your children?
a. Until your youngest child is 18
b. Until you are age 50.
c. Until your youngest child is 23.
d. For your entire life.
13. If there is a high risk that you will be laid off from your job, you should:
a. Take out a home equity line of credit (HELOC) that you can tap in case of emergency.
b. Begin building your emergency savings and start a job hunt now.
c. Make sure that you know how to file for unemployment benefits and how much they will be
d. Apply for a credit card with a high credit limit so you can have access to money in the event
you lose your source of income.
14. If you are laid off and your former company has 20 or more employees, your employer is required
to:
a. Provide you with three months of free health care and a severance package equal to at least
three months of pay.
b. Allow you to remain on the company health plan for 12 months at the same rate you had
been paying as an employee.
c. Allow you to stay on the company health plan for 18 months at a rate of 102% of the total cost
of the premium.
d. Offer you a severance package equal to one month’s pay for every year of employment.
15. If you lose your job and the COBRA rate for your company’s health insurance is very expensive,
you should:
a. Shop online for less-expensive coverage or check with your state to see if they are offering
an affordable plan.
b. Consider going without insurance until you get a new job, as long as you are healthy now.
c. Take a loan from your 401(k) plan to pay for insurance until you can replace it with a more
affordable plan.
Week 3 Quiz
d. Go without health insurance if you have 8 months of living expenses in an emergency fund to
cover a medical emergency.
16. If you lose your job, how many days do you have to sign up for your company’s health plan under
COBRA regulations?
a. Thirty days.
b. Sixty days.
c. 180 Days.
d. 365 days.
17. When purchasing homeowner’s insurance, you should look for a policy that:
a. Will cover the actual cash value of your house and possessions.
b. Will cover two times the actual cash value of your house and possessions.
c. Will cover the replacement value of your house and possessions.
d. Does not adjust your coverage based on inflation, since this could end up costing you more in
annual premiums.
18. When it comes to insurance, if you rent your house or apartment, you should:
a. Purchase insurance that covers both the physical building and your possessions, just as you
would if you were a homeowner.
b. Purchase insurance that covers the actual cost of your possessions but does not cover the
building structure.
c. Make sure that your landlord has insurance that covers the building and your possessions.
d. Purchase insurance that covers the replacement cost of your possessions but does not cover
the building structure.
19. If you own a condominium, co-op or townhouse, your owners’ association insurance generally
covers:
a. The entire building, including your unit, but not your possessions.
b. The entire building, including your unit, as well as your possessions.
c. Only the common areas of your building, such as the stairway, elevators and roof.
d. Only the possessions that are in jointly shared areas.
20. Which of the following is a good way to save on your homeowner’s or renter’s insurance?
a. Bundle your auto and homeowner’s or renter’s policies with the same insurer.
b. Reduce coverage on your home, but continue to cover close to its cash value.
c. Reduce coverage on your possessions, since they generally depreciate in value every year.
d. Reduce your coverage to the minimum and increase your emergency savings to 12 months
of living expenses.
21. Which of the following types of insurance protects you if you are sued for accidentally damaging
someone’s property or hurting another person?
a. Term life insurance.
b. Accidental death insurance.
c. Universal life insurance.
d.Personal liability insurance or an umbrella policy.
22. To reduce the cost of your auto insurance, you should:
a. Purchase only the minimum, mandatory coverage.
b. Purchase a new car every three years, since older cars cost more to insure and maintain.
c. Raise your deductible to $1,000, as long as you have emergency savings to cover you.
d. Lease a car, since leased cars cost less to insure.
Week 3 Quiz
Answer Sheet
1. A
2. B
3. C
4. C
5. A
6. D
7. C
8. C
9. B
10. B
11 A
12. C
13. C
14. C
15. A
16. B
17. C
18. D
19. B
20. A
21. D
22. C