PERSONAL FINANCE

QUIZ 6

NAME: Navarro, Leslie S. SCORE: _______

SECTION: HRDM31 DATE: ________

ANSWER THE FOLLOWING QUESTIONS:

1. What is financial protection? Why does an individual need protection in relation to personal finance?

Financial protection is when direct payments made to obtain health services do not expose

people to financial hardship and do not threaten living standards. An individual need a financial

protection because it acts as a safety plan because not everything goes as you planned, what if you

became too ill to work? Can your family cope financially without your income? Financial protection is

needed for those situations.

2. What is personal life insurance? How does life insurance work? What are the different types of life

insurance?

Personal life insurance is a policy that guarantees the insurer to pay a sum of money to named

beneficiaries. When the policyholder dies, the insurer pays a sum of money to the policyholders

beneficiaries in exchange of premium paid by the policyholder during their lifetime. The types of

personal life insurance are:

  Term life insurance

 Whole life insurance

 Universal life insurance

 Indexed universal life insurance

 Variable life insurance

 Variable universal life insurance

 Final expense insurance

 Group life insurance

3. What is individual health insurance? How does individual health insurance work?

Individual health insurance is a policy that an individual purchased for themselves and their

family based upon personal needs and budget. Individual insurance is a way to pay for your health care ,

you will choose a plan and will agree to pay certain rate each month, in return your insurer agrees to

pay a portion of your covered medical costs.

4. What is retirement planning? Importance of retirement planning. Explain the steps in retirement

planning.

Retirement planning is a policy that will decides how you will live once you are old and no longer

wish or are unable to work. The steps in retirement planning are:

A. Firstly, you need to set your retirement goals

B. Second, assess your current financial position.

C. Three, calculate the amount of money you will need for your retirement goals and account for

the help you will get from current wealth.

 D. Four, identify retirement corpus builders.

E. Five, set up a system to generate monthly income from retirement corpus.

5. What is estate planning and why it is important? What should be included in estate planning?

Estate planning is a preparation of tasks that serve to manage an individual's asset base in the

event of their disablement or death. Estate planning involves how an individual’s assets will be

preserved, managed, and distributed after disablement or death. Things that should be included in

estate planning:

 Will/trust

 Durable power of attorney

 Beneficiary designations

 Letter of intent

 Healthcare power of attorney

 Guardianship designations