The Insurance Quiz: How Much Do You Know?


Insurance is a complicated business, with an even more complicated lexicon. That means it's easy to feel like you don't have a grasp on all the terminology and details. 

But the insurance industry is vast, covering everything from home and car insurance to life and health coverage. That’s why we created this quiz: to help you get your bearings when it comes to insurance.

 There are 20 questions in this quiz, with multiple choice answers ranging from very easy to very hard. Depending on how you score, we recommend follow-up reading or videos in areas where you struggled. Even if you’re an expert in some areas, these questions will challenge your knowledge of others. Don’t be afraid – test your skills and let us know how you do!

Check Your Knowledge: Insurance Basics

Why do people buy insurance? Insurance is designed to help you bounce back financially when something bad happens. Whether it’s a car accident, a house fire, or a serious illness, there are some things that are completely out of your control.

 That’s why it’s important to have insurance in place that can help mitigate some of the financial impact of those uncontrollable events. What’s the difference between life insurance and health insurance? In a nutshell, health insurance is designed to cover medical expenses and daily living costs if you are unable to work.

 Life insurance, on the other hand, is designed to pay out a lump sum to your loved ones if you pass away. What is the difference between property and casualty insurance and liability insurance? Property and casualty (P&C) insurance is designed to protect you against financial loss due to damage to your property.

 Liability insurance, on the other hand, is designed to protect you against financial loss due to claims of bodily injury or property damage that are brought against you.

Auto Insurance Quiz

What is GAP insurance? GAP insurance is designed to cover the difference between what you owe on an auto loan and the amount an insurance company pays out for a totaled car.

 If you don’t have GAP insurance and your car is totaled, you will still owe the remainder of your auto loan. What does SR-22 stand for? The SR-22 designation is a type of certification that your car insurance company will require if you’ve had multiple traffic violations.

 What is the Comprehensive portion of my car insurance policy? The comprehensive portion of your car insurance policy is designed to cover damage to your car caused by events like hail, flooding, fire, or vandalism.

Homeowner's Insurance Quiz

What is a deductible? A deductible is the amount of money you must pay out of pocket before your insurance policy kicks in. For example, if your roof were to get damaged in a hailstorm, a deductible of $1,000 would mean that you would be responsible for fixing your roof up to $1,000 and your insurance company would cover everything above that amount. What is a HO-8 policy? The HO-8 policy is the standard homeowners insurance policy.

Life Insurance Quiz

What is the term “death benefit”? The death benefit is the amount of money that your life insurance policy will pay out to your loved ones if you pass away. 

What is actuarial equivalence? Actuarial equivalence is the process of determining the amount of money you need to set aside to cover your future death benefit payments.

Health Insurance Quiz

What is the individual mandate? The individual mandate is the requirement that all individuals maintain health insurance coverage.

 What is the open enrollment period? The open enrollment period is the one time per year when you can switch health plans. What is a bronze plan? Bronze health insurance plans are less expensive than silver or gold plans, but they carry higher deductibles and out-of-pocket costs.

The Bottom Line

While insurance is designed to help protect you financially, there are also a lot of myths and misconceptions around the industry. The best way to combat these myths and become a more informed insurance shopper is to be informed. Start by taking this quiz to test your knowledge of the basics. Then, use that knowledge as a launching pad to dive deeper into the industry.

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