Foundations in Personal Finance:
Chapter 9 Dave Ramsey Questions and
Answers Latest Version 100% Pass
What is the main purpose of insurance in personal finance?
✔✔ To transfer financial risk from the individual to the insurance company
Why is having health insurance important even if you are young and healthy?
✔✔ Unexpected medical expenses can be financially devastating
What is the benefit of term life insurance over whole life insurance?
✔✔ It provides more coverage for a lower premium
Why is it important to have homeowner’s or renter’s insurance?
✔✔ It protects your property and belongings in case of damage or theft
What type of insurance covers your income if you are unable to work due to injury or illness?
✔✔ Disability insurance
1
,Why should you always carry car insurance even if your car is old?
✔✔ It protects you from liability and covers damages in an accident
What does liability coverage in auto insurance pay for?
✔✔ It pays for damage or injury you cause to others in an accident
What kind of insurance should a college student consider having?
✔✔ Health insurance and renter’s insurance
What is the purpose of a deductible in an insurance policy?
✔✔ It’s the amount you pay out of pocket before the insurance company pays the rest
Why is it important to review your insurance coverage annually?
✔✔ Your needs may change, and you may need more or less coverage
What does an umbrella policy provide?
✔✔ Extra liability protection beyond your regular coverage
2
, Why should you not rely solely on your employer’s life insurance policy?
✔✔ If you leave the job, the policy may not go with you
What kind of insurance should be dropped once your children are financially independent?
✔✔ Life insurance
What is the best way to save money on insurance premiums?
✔✔ Shop around and increase your deductible
What is one risk of not having long-term care insurance as you age?
✔✔ Nursing home or in-home care could drain your savings
Why is identity theft protection an important part of a financial plan?
✔✔ It helps cover the cost and time to recover your identity if it is stolen
Why should you avoid insurance policies with cash value or investment components?
✔✔ They are more expensive and offer less value than term insurance
3
Chapter 9 Dave Ramsey Questions and
Answers Latest Version 100% Pass
What is the main purpose of insurance in personal finance?
✔✔ To transfer financial risk from the individual to the insurance company
Why is having health insurance important even if you are young and healthy?
✔✔ Unexpected medical expenses can be financially devastating
What is the benefit of term life insurance over whole life insurance?
✔✔ It provides more coverage for a lower premium
Why is it important to have homeowner’s or renter’s insurance?
✔✔ It protects your property and belongings in case of damage or theft
What type of insurance covers your income if you are unable to work due to injury or illness?
✔✔ Disability insurance
1
,Why should you always carry car insurance even if your car is old?
✔✔ It protects you from liability and covers damages in an accident
What does liability coverage in auto insurance pay for?
✔✔ It pays for damage or injury you cause to others in an accident
What kind of insurance should a college student consider having?
✔✔ Health insurance and renter’s insurance
What is the purpose of a deductible in an insurance policy?
✔✔ It’s the amount you pay out of pocket before the insurance company pays the rest
Why is it important to review your insurance coverage annually?
✔✔ Your needs may change, and you may need more or less coverage
What does an umbrella policy provide?
✔✔ Extra liability protection beyond your regular coverage
2
, Why should you not rely solely on your employer’s life insurance policy?
✔✔ If you leave the job, the policy may not go with you
What kind of insurance should be dropped once your children are financially independent?
✔✔ Life insurance
What is the best way to save money on insurance premiums?
✔✔ Shop around and increase your deductible
What is one risk of not having long-term care insurance as you age?
✔✔ Nursing home or in-home care could drain your savings
Why is identity theft protection an important part of a financial plan?
✔✔ It helps cover the cost and time to recover your identity if it is stolen
Why should you avoid insurance policies with cash value or investment components?
✔✔ They are more expensive and offer less value than term insurance
3
