Insurance and Financial Concepts Quiz

Premium is the payment made by the insured to the insurer in exchange for insurance coverage.

Life insurance primarily functions to offer financial protection to beneficiaries in the event of the insured's death.

Whole life insurance accumulates cash value over time, distinguishing it from term life insurance.

Cash surrender value is the sum of cash value that a policyholder can withdraw from a life insurance policy.

Underwriting in the insurance industry involves assessing risks to determine appropriate premium rates for policyholders.

Term life insurance covers a specific period, while whole life insurance provides coverage for the insured's entire life.

An annuity is a financial contract that guarantees a series of payments over a specified period.

Deductible is the maximum amount the insured must pay before the insurer covers the remaining expenses.

Cash value in permanent life insurance is the amount a policyholder receives upon surrendering the policy.

Reinsurance involves transferring risk from one insurer to another to manage exposure and protect against large losses.

Cash flow in finance refers to the net amount of money received and spent by a company within a specific period.

Hedging in finance involves minimizing potential losses by offsetting one investment with another.