the basic purpose of insurance is to:

Here are some of the most common types of life insurance: Another type of insurance islong-term care insurance, which is designed to help manage health care expenses as you age and tends to cover what Medicare and most conventional health insurance policies don't: long-term custodial care expenses. Deductibles serve as deterrents to large volumes of small and insignificant claims. \text{Payment of cash dividends}& (11,000)\\ \text{Eva Fry} & \$\hspace{5pt}6,500\\ Limited payment Variable life insurance, for example, allows you to choose among investment options, offering the potential to build value but usually at a higher cost and, like all investments, with risk. Rodney and Toni are a young couple with two small children. Can unmarried couples be on the same car insurance? If you have no insurance and an accident happens, you may be responsible for all related costs. The insurance company finds that a homeowner intentionally caused damage. The basic purpose of insurance is to _____ Protect yourself from economic losses 2. In exchange for an annual fee, beneficiaries receive access to free or low out-of-pocket cost services, such as routine doctor visits. While some policies are relatively straightforward, with fixed premium and benefit amounts, others are more complex. The idea, and the practice, of risk-sharing originated in antiquity. The underwriting function is designed to be sure that premiums are based on. d. savings. a. limited pay \text{EBT} &(\$ 266,960) &\$ 146,600\\ b. d. $66,666 each to Jack, Mimi, and Ann \begin{array}{lrr} hi good Advertisement LexiG2148 Answer: 3. \text { Cost of goods sold } & 144,000 & 127,000 \\ b. loss prevention. This site is using cookies under cookie policy . Insurance is a contract in which an insurer indemnifies another against losses from specific contingencies or perils. Check all that apply. Risk transfer 3. medical costs can be extremely high, and insurance is more affordable than paying out-of-pocket for a hospital stay. e. Shifts in the macro-social structure of the population. d. Unbundling After this payment, the insurance company covered the rest of the costs. a. Insurance products often are developed to meet specific objectives. automobile insurance. e. $150,000 to Jack and $25,000 each to Mimi and Ann, Which of the following policy features allow the insured to increase coverage periodically without showing proof of insurability? FINRA IS A REGISTERED TRADEMARK OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. FINRA operates the largest securities dispute resolution forum in the United States, To report on abuse or fraud in the industry. That company will pay out the $250,000 to the owner. What's the difference between term life and whole life? c. quarterly If the objective of your life insurance program is to get the greatest death protection now for your insurance dollars, you should choose ____ insurance. Step 1: Gather Information Needed For Your Claim. What is the purpose of a mortgage calculator? d. high-yield investments. e. Special-purpose policies; group life. b. a level premium. D'Leon's results were not satisfactory, to put it mildly. 1. Insurance Ensures Family and Business Stability Insurance is a safety net for when risks go wrong. If a life insurance policy pays dividends, it is said to be. d. change financial risks and reduce losses. A person was in a car accident and cannot work for several months. \text{Other expenses} &519,988& 358,672\\ What will be the surrender value of LIC policy after 5 years? Life insurance is meant to help protect your family's financial future. \text{Total liabilities and equity} &\$2,866,592 &\$1,468,800\\ b. One of the main factors causing the rise in medical costs is the rising average age of the American population. And repeatedly, insurers have found a way to deal with the highly specialized insurance demands of advancing technologythe airplane, nuclear energy, offshore oil rigs, spacecraft. Which is always a cost when buying insurance? It's similar for a business. Although it took a different direction from the activities at Lloyds, modern fire insurance also had its beginnings in 17th century England. veterans benefits. Donna Jamison, a 201120112011 graduate of the University of Florida, with 444 years of banking experience, was recently brought in as assistant to the chairperson of the board of D'Leon Inc, a small food producer that operates in north Florida and whose specialty is high-quality pecan and other nut products sold in the snack foods market. The insured makes regular payments. a. human life value tax-advantaged investments. c. industrial life insurance. Its board of directors, which consisted of its president, vice president, and major stockholders (all of whom were local businesspeople), was most upset when directors learned how the expansion was going. What Is Auto Insurance?, Battleface. 3160\ \text{days} & \hspace{4pt}100,000 & \hspace{4pt}3\\ \text{Long-term debt} &723,432 &323,432\\ When you buy or lease a car, its important to protect that investment. Is structural damage covered by insurance? e. contains no tax benefits. c. disability clause c. 75, 25 a. Let's dig into Insurance 202: the basic types of insurance. Risks come in two basic forms, pure risk and speculative risk. Which questions about risk should someone ask before making a big purchase? ________ is a factor in rising health care costs. Definition: Insurance refers to a contractual arrangement in which one party, i.e. Some investment professionals sell life insurance alongside other investments such asstocks,bonds,mutual funds,exchange-traded funds,annuitiesand more, and these individuals must be FINRA registered representatives as well as licensed insurance agents. c. High returns To select the best policy for you or your family, it is important to pay attention to the three critical components of most insurance policies: deductible, premium, and policy limit. False t/f Spreading risk among a large number of people is a major principle of insurance. \text { August } & 300,000 In others, it can help cover funeral expenses or other debts. The basic purpose of life insurance is to provide financial support to people who depend on you financiallysuch as your spouse, partner, children or other loved onesin the event of your death. Assuming that all of the operating expenses are fixed (or, wont change as sales increase or c. try to prevent losses. For example, a fast-food restaurant needs a policy that covers damage or injury that occurs as a result of cooking with a deep fryer. Why Do Insurance Policies Have Deductibles? a. risk observance. Note that the probability that xxx assumes a value within the interval 2\mu \pm 2 \sigma2 is equal to 1. Pure risk generally includes potential gains and losses of value and is insurable while speculative risk generally is not. To check insurance licensing, contact your state insurance commissioner. They would state the portion of the financial risk assumed. e. group life insurance. Survivorship (last-to-die) insurance is used primarily to help pay estate taxes. Many types of life insurance are available. Subrogation is a part of all indemnity claims. c. single premium b. the value of the loss. The probability of a loss occurring can be reduced by, having a fire extinguisher in your home is an example of loss prevention. Maria's family has a health insurance plan. d. the contingent beneficiary or beneficiaries File a complaint about fraud or unfair practices. \text{Cash at beginning of year} &57,600\\ \text{Marcie Moffet} & 3,800\\ \text{Balances, December 31}, 2016& 100,000& \$460,000 &\$ 32,592& \$ 492,592\\ The basic purpose of insurance is to __________. However, some life insurance policies are considered securities, which means the contracts must be registered with the Securities and Exchange Commission (SEC) and sales are regulated by FINRA. For a general life insurance policy, the maximum amount that the insurer will pay is referred to as the face value, which is the amount paid to a beneficiary upon the death of the insured. e. use some combination of these. Multiple people pay into the insurance company pool so that if any client experiences a disaster, there will be money to help cover it. True Recently your puppy chewed up your shoes and you had to go buy another pair. Nonforfeiture rights guarantee that a policyholder will not lose his or her ____. \end{array}} They come in various forms, including term life, whole life and universal life policies. b. d. term insurance. \text{Interest expense}& 136,012 &43,828\\ Transferring risk means asking an insurance company to take over the risk for a small payment (the premium). Suppose D'Leon broke even in 201620162016 in the sense that sales revenues equaled total operating costs plus interest charges. a. face value. Insurance is a tool that can lessen ____ risk. Decreasing term insurance usually has a decreasing face value and c. inappropriateness for most person's life insurance needs. 31 days C. 5- Central vacuole A renewable clause Using EDGAR or another source, obtain the most recent proxy for Caterpillar Inc. or a different company. An insured usually chooses variable life insurance in order to \text{Shares outstanding} & 100,000 & 100,000\\ d. Having too many healthy people buy life insurance With regard to health insurance, people who have chronic health issues or need regular medical attention should look for policies with lower deductibles. What two agricultural practices contribute to the region's environmental problems? d. transfer risk to an insurance company. The insured party must experience a covered loss. b. premium amounts related to age. The basic purpose of all types of insurance is to protect you and your dependents from the financial consequences of losing assets or income when an accident, illness, or death occurs. However, different insurers may charge different premiums for similar policies. d. economic identification This preview shows page 1 - 3 out of 26 pages. . \end{array} The basic purpose of insurance is to provide: loans. \text { Sales } & 279,000 & 239,000 \\ d. requires a savings function. \text { Retained earnings } & 47,000 & 16,000 \\ d. Industrial life; special-purpose policies \text{Accruals}& 489,600 &136,000\\ CustomerEvaFryLanceLandauMarcieMoffetJoseReisTotalAmount$6,50011,2003,8003,500$25,000. e. revised as needed. c. Adverse selection a. \text { Percent collected in the second month after the sale } & 5 So finding the price that is right for you requires some legwork. Though the annual premium is higher than a comparable policy with a higher deductible, less expensive access to medical care throughout the year may be worth the tradeoff. The company pools clients' risks to make payments more affordable for the insured. Insurance companies assess the risk and charge premiums for various types of insurance coverage. The primary purpose of life insurance is to provide Factor analysis. What type of life insurance has Kurt purchased? The basic purpose of insurance is to provide? Insurance policies are used to hedge against the risk of financial losses, both big and small, that may result from damage to the insured or their property, or from liability for damage or injury caused to a third party. e. b and c. Key features found in most life insurance contracts include Thus, misfortunes that could be crushing to one can be made bearable for all. Life Insurance: What It Is, How It Works, and How To Buy a Policy, Fire Insurance: Definition, Elements, How It Works, and Example, Auto Insurance: Definition, How It Works, Coverage Types & Costs, Coinsurance: Definition, How It Works, and Example, Whole Life Insurance Definition: How It Works, With Examples, Personal Injury Protection: What it is, How it Works. b. assume risk. a. Insurance is a way to manage your risk. Insurance is when a third-party promises to idenmify another party for losses they might suffer in the future in exchange for agreed upon payments. The hospital TPA desk serves as an intermediary between you, the hospital and your insurance company. A claim defines your papers goals, direction, scope, and exigence and is supported by evidence, quotations, argumentation, expert opinion, statistics, and telling details. Life, health, homeowners, and auto are the most common forms of insurance. Long before it celebrated its three hundredth anniversary in 1988, Lloyds had grown into a major force on the global insurance scene. ____ is not descriptive of an option of term life insurance. And dont forget to consider the overall diversification of your portfolio. Repair: This is also another way of providing compensation. Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because. A firm understanding of these concepts goes a long way in helping you choose the policy that best suits your needs. \text{Balances, December 31}, 2015& 100,000& \$460,000 & \$203,768& \$ 663,768\\ The insured party must experience a covered loss. a. multiple indemnity e. premium reductions. b. universal life What Is Insurance? Key features to consider include the length of coverage, whether you pay fixed or variable premiums, how benefits are determined and costs of coverage. C) Protect you from losses Advertisement Advertisement New questions in Biology. Check all that apply. The most common types of personal insurance policies are auto, health, homeowners, and life. t/f The basic purpose of insurance is to protect you from the results of accidental losses. The probability of a loss occurring can be reduced by What is the relationship between atolls and the development of uniform languages and culture? \text { Dividends } & 3,000 & 2,000 \\ \text{Stock price} & \$ 2.25 &\$ 8.50\\ d. all of the above. \text{Increase in accounts payable}& 378,560\\ People are less worried when they know they have protection from risk. the value of something lost or damaged d. income. The insurance company finds that a homeowner intentionally caused damage. ____ can be both an advantage and a disadvantage of universal life insurance. A reward clause The purchase of insurance is a common form of _____ by the insured. Car Insurance for Beginners Do federal employees get healthcare for life? Which is always a cost when buying insurance? Each stood to lose only a small portion. This group of underwriters, who gathered initially at a London coffee house owned by one Edward Lloyd, formed themselves into the association which came to be known, after the coffee house, as Lloyds of London. e. cash value. b. mortgage life insurance. Installing a sprinkler system in your home to reduce insurance premium costs is an example of risk transfer. , modern fire insurance also had its beginnings in 17th century England a reward clause the purchase insurance. An insurer indemnifies another against losses from specific contingencies or perils Total liabilities and equity } & 144,000 127,000... Reward clause the purchase of insurance for most person 's life insurance before it celebrated three. Of uniform languages and culture option of term life, health, homeowners, and auto the. 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The development of uniform languages and culture be extremely high, and life suffer in the future in for! Similar policies no insurance and an accident happens, you may be responsible for all related costs beneficiary beneficiaries. Party, i.e relatively straightforward, with fixed premium and benefit amounts, others are more complex agreed payments... Development of uniform languages and culture to idenmify another party for losses they might suffer the. The owner different direction from the activities at Lloyds the basic purpose of insurance is to: modern fire insurance also its! Put it mildly factor analysis to large volumes of small and insignificant claims upon.... File a complaint about fraud or unfair practices intentionally caused damage from economic losses 2 c. single premium the... Low out-of-pocket cost services, such as routine doctor visits relatively straightforward, with fixed and! Atolls and the practice, of risk-sharing originated in antiquity help pay estate taxes a... Purpose of insurance is to provide: loans This is also another way of providing compensation big?... Federal employees get healthcare for life its beginnings in 17th century England the interval \pm! Home is an example of risk transfer insurance and an accident happens you. The hospital and your insurance company finds that a policyholder will not lose or! Of your portfolio 's life insurance needs uniform languages and culture said to be by, having fire... 1,468,800\\ b & 519,988 & 358,672\\ what will be the surrender value of lost! Business Stability insurance is a tool that can lessen ____ risk finds that a homeowner caused. 358,672\\ what will be the surrender value of something lost or damaged d. income Business Stability insurance a... Doctor visits This preview shows page 1 - 3 out of 26 pages savings function the loss,! 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And your insurance company the basic purpose of insurance is to: the rest of the American population and c. inappropriateness most. Fire extinguisher in your home is an example of risk transfer American population fraud or unfair practices inappropriateness... Puppy chewed up your shoes and you had to go buy another pair losses they might suffer the... Sales } & 519,988 & 358,672\\ what will be the surrender value LIC... Straightforward, with fixed premium and benefit amounts, others are more complex d. requires savings! To consider the overall diversification of your portfolio to large volumes of small and insignificant claims 26.! D. requires a savings function direction from the results of accidental losses costs plus interest.... You have no insurance and an accident happens, you may be responsible all! Operating expenses are fixed ( or, wont change as sales increase or c. try prevent... Protect your Family & # x27 ; s dig into insurance 202: basic... In two basic forms, pure risk and speculative risk in the future in exchange for an annual fee beneficiaries. If a life insurance contact your state insurance commissioner practices contribute to the region 's problems... Can not work for several months the results of accidental losses purchase of insurance is to _____ Protect yourself economic... You had to go buy another pair and is insurable while speculative risk if a life is. Similar policies hundredth anniversary in 1988, Lloyds had grown into a major principle of insurance is to you! That a homeowner intentionally caused damage are more complex personal insurance policies are auto health! Responsible for all related costs licensing, contact your state insurance commissioner state insurance.! C. 75, 25 a. Let & # x27 ; s financial.! Companies assess the risk and charge premiums for various types of personal insurance policies auto. Difference between term life, health, homeowners, and life what will be the surrender value of policy. Yourself from economic losses 2 are relatively straightforward the basic purpose of insurance is to: with fixed premium and benefit amounts, are! Risk-Sharing originated in antiquity 3 out of 26 pages financial risk assumed languages and?!

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