(Dave Ramsey) Chapter 8 Questions and
Answers Latest Version Graded A+
What is the primary purpose of insurance?
✔✔ To protect against financial loss in case of unexpected events, such as accidents, illness, or
damage.
Why should you have an emergency fund before buying insurance?
✔✔ To avoid using insurance for smaller, manageable expenses and to ensure that you’re
covered for larger, unexpected costs without going into debt.
What is a deductible in an insurance policy?
✔✔ The amount you must pay out-of-pocket before your insurance policy kicks in to cover the
rest of the cost.
What is the difference between term life insurance and whole life insurance?
✔✔ Term life insurance provides coverage for a specific period, while whole life insurance
covers you for life and includes a savings or investment component.
1
,Why is it important to have health insurance?
✔✔ Health insurance helps cover medical expenses, preventing you from incurring large,
unmanageable costs for health care services.
How does renter's insurance protect you?
✔✔ Renter's insurance covers your personal property in case of theft, fire, or other damage and
also provides liability protection if someone is injured in your rental property.
What is the role of auto insurance?
✔✔ Auto insurance protects you financially in case of an accident, theft, or damage to your
vehicle, and covers liability for any injuries or property damage you cause.
What should you look for when selecting a health insurance plan?
✔✔ Look for coverage that meets your needs, reasonable premiums, low deductibles, and a
network of doctors or hospitals you prefer.
Why is it necessary to review your insurance needs regularly?
✔✔ Life changes, such as marriage, children, or buying a home, may alter your insurance
requirements, so it’s important to update your policies accordingly.
2
, What is the purpose of disability insurance?
✔✔ Disability insurance provides income replacement if you are unable to work due to injury or
illness, ensuring you can cover living expenses.
Why should you consider using an insurance agent?
✔✔ An insurance agent can help you find the right coverage for your needs, explain complex
policy terms, and assist you in making informed decisions about your insurance.
What is a beneficiary in an insurance policy?
✔✔ A beneficiary is the person or entity that receives the payout from an insurance policy in
case of the policyholder’s death or other qualifying events.
What is the difference between liability insurance and comprehensive auto insurance?
✔✔ Liability insurance covers damages and injuries you cause to others in an accident, while
comprehensive insurance covers damage to your vehicle from non-collision incidents like theft
or weather damage.
How can having a high credit score affect your insurance premiums?
3
Answers Latest Version Graded A+
What is the primary purpose of insurance?
✔✔ To protect against financial loss in case of unexpected events, such as accidents, illness, or
damage.
Why should you have an emergency fund before buying insurance?
✔✔ To avoid using insurance for smaller, manageable expenses and to ensure that you’re
covered for larger, unexpected costs without going into debt.
What is a deductible in an insurance policy?
✔✔ The amount you must pay out-of-pocket before your insurance policy kicks in to cover the
rest of the cost.
What is the difference between term life insurance and whole life insurance?
✔✔ Term life insurance provides coverage for a specific period, while whole life insurance
covers you for life and includes a savings or investment component.
1
,Why is it important to have health insurance?
✔✔ Health insurance helps cover medical expenses, preventing you from incurring large,
unmanageable costs for health care services.
How does renter's insurance protect you?
✔✔ Renter's insurance covers your personal property in case of theft, fire, or other damage and
also provides liability protection if someone is injured in your rental property.
What is the role of auto insurance?
✔✔ Auto insurance protects you financially in case of an accident, theft, or damage to your
vehicle, and covers liability for any injuries or property damage you cause.
What should you look for when selecting a health insurance plan?
✔✔ Look for coverage that meets your needs, reasonable premiums, low deductibles, and a
network of doctors or hospitals you prefer.
Why is it necessary to review your insurance needs regularly?
✔✔ Life changes, such as marriage, children, or buying a home, may alter your insurance
requirements, so it’s important to update your policies accordingly.
2
, What is the purpose of disability insurance?
✔✔ Disability insurance provides income replacement if you are unable to work due to injury or
illness, ensuring you can cover living expenses.
Why should you consider using an insurance agent?
✔✔ An insurance agent can help you find the right coverage for your needs, explain complex
policy terms, and assist you in making informed decisions about your insurance.
What is a beneficiary in an insurance policy?
✔✔ A beneficiary is the person or entity that receives the payout from an insurance policy in
case of the policyholder’s death or other qualifying events.
What is the difference between liability insurance and comprehensive auto insurance?
✔✔ Liability insurance covers damages and injuries you cause to others in an accident, while
comprehensive insurance covers damage to your vehicle from non-collision incidents like theft
or weather damage.
How can having a high credit score affect your insurance premiums?
3
