Quiz: Emergency Fund and Insurance 4 questions · 80% to pass 1. How many months of essential expenses should an emergency fund cover?1-2 months3-6 months12 months24 monthsThe standard recommendation is 3-6 months of essential expenses, with the exact amount depending on job stability and income sources.2. Where should you keep your emergency fund?In a brokerage account invested in stocksIn cryptocurrency for higher returnsIn a high-yield savings accountIn a certificate of deposit with a 5-year termA high-yield savings account provides liquidity (access within 1-2 business days) and a reasonable return without risking principal during a market downturn.3. What does umbrella insurance do?Covers weather damage to your homeExtends liability coverage beyond your home and auto policy limitsReplaces your income if you are disabledPays off your mortgage if you dieUmbrella insurance provides additional liability coverage above the limits of your home and auto policies, typically in $1M increments.4. Why is disability insurance considered more important than many people realize?It is tax-deductibleIt covers property damageLong-term disability is more likely than early deathEmployers are required to provide itAbout 1 in 4 workers will experience a disability lasting 90+ days before age 67. Long-term disability is statistically more likely than premature death, making income protection critical. Check answers Retake quiz Back to lesson Next lesson →