Which of the following statements about the ‘Property Insurance’, ‘Motor Vehicle Insurance’, ‘Health Insurance’ and ‘Travel Insurance’ sections of the lecture material are TRUE:

1. In Australia, insuring any damage to another person’s vehicle is covered under the ‘Green Slip’ and is required whenever someone renews their registration each year.
2. The cost of emergency transport by ambulance is covered under the Medicare system in Australia.

Which of the following statements about the ‘Estate Planning’, ‘Wills’ and ‘Enduring Power of Attorney’ sections of the lecture material are TRUE:

1. An executor of a will is the person who is responsible to make sure that the assets are distributed according to the instructions provided in the will. An executor cannot be a beneficiary of the will.
2. You cannot leave someone your superannuation in your will because you do not directly own your superannuation as an asset. It is held in trust on your behalf. Instead, someone should generally nominate beneficiaries with their superannuation fund directly.

Which of the following statements about the ‘Life Insurance’ section of the lecture material are TRUE:

1. Life insurance policies that bundle a savings product together with death cover in one policy can be a good option for people who would like to make sure that they receive a payout at age 60 whether they live until 80 or die prematurely before the age of 60.
2. Trauma insurance pays a lump-sum amount upon diagnosis of a serious illness, such as cancer. This could be a useful form of insurance if someone has a history of a particular type of cancer in their family.

Which of the following statements about the ‘Life Insurance’ section of the lecture material are TRUE:

1. If income protection (or salary continuance) is taken out inside superannuation, it can be cheaper than a similar policy taken outside of superannuation. However, if taken outside of superannuation, the premiums are often tax deductible and there may be less of a problem from losing benefits when transferring between different superannuation funds.
2. Income protection can replace a portion of a person’s income if they have an accident or illness that prevents them from working. After the accident or illness occurs, the person can nominate whether to wait between 14 and 90 days until the benefit starts. They can also decide on a benefit period of between 2 years and all the way until age 65.

Which of the following statements about the ‘Life Insurance’ section of the lecture material are TRUE:

1. Death cover pays a lump-sum amount upon death. The amount of death cover that most people need should normally increase between the ages of 20 and 60 (with the most needed at age 60).
2. If someone takes out $1 million in ‘Death and TPD cover’, then they will be paid a lump-sum of $1 million upon either death or total and permanent disability. One possible problem with TPD insurance is about the definitions of what constitutes ‘total and permanent disability’.

An elderly couple receive some of the Age Pension. They live in a home in Sydney that they own together. It is currently valued at $2 million. Which of the following is the MOST likely reason why they are able to receive the Age Pension?

Which of the following statements about the ‘What is Risk?’, ‘Risk and Human Bias’ and ‘What is Risk Management?’ sections of the lecture material are TRUE:

1. If the probability of a pure-risk event occurring is ‘almost certain’ but the impact is only ‘minor’ then it would normally only require a low level of risk management planning because it only has a minor impact.
2. An individual can either lose $100 for certain (with 100% probability) or take a gamble. The gamble involves a 10% probability of losing $1,000 and a 90% probability of losing $0. A typical person exhibiting human bias would usually take the gamble, even though the rational risk-averse choice would be to take the certain loss of $100.

Which of the following concepts is MOST consistent with a situation in which an individual takes out insurance for their home and contents, and then fails to take adequate security precautions (such as locking their door when they leave the premises) because they know they are insured for any losses:

Which of the following statements about the ‘What is Risk?’ section of the lecture material based on the diagram below are TRUE:

1. A risk-averse individual would always prefer A to B because they both offer the same expected reward while B has a higher level of risk than A.
2. A risk-averse individual would always prefer A to C because A has a significantly lower level of risk than C.

Which of the following statements about the ‘What is Risk?’ section of the lecture material are TRUE:

1. There is risk whenever there is some uncertainty about outcomes.
2. A situation in which the value of an asset can either remain the same or decreases over a period of time can be described as ‘Pure Risk’.