b. limited pay What Is Insurance?, Insurance Information Institute. Check all that apply. Its also known as no-fault insurance.. &&\underline{\textbf{Common Stock}}\\ It lowers the payout the company has to make. 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. e. use some combination of these. Many types of life insurance are available. Thousands of years have elapsed since Chinese merchants devised an ingenious way of protecting themselves against the chance of a financially ruinous upset in the treacherous river rapids along their trade routes. \text{Increase in accounts receivable}& (280,960)\\ \text{Total} & \underline{ \underline{ \$25,000}} Firm compliance professionals can access filings and requests, run reports and submit support tickets. Businesses require special types of insurance policies that insure against specific types of risks faced by a particular business. c. fixed amount. Whole life insurance is designed to provide Its aim is to reduce financial uncertainty and make accidental loss manageable. After this payment, the insurance company covered the rest of the costs. b. universal life b. When an insurance company needs to provide a payout, the money is removed from. c. savings and loan value. \text{Inventories}& 1,287,360 &715,200\\ b. assume risk. The basic purpose of insurance is to provide protection. FINRA has jurisdiction over the investment professionals and firms that sell this type of insurance product. the food we eat the air we breathe the water we drink sunlight e. Fixed returns, The death benefit of ____ life insurance may go down due to poor investment returns. \text{Lance Landau} & 11,200\\ Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized. B. e. expense levels. a. lump sum. With most insurers, paying life insurance premiums on a(n) ____ basis will allow you to avoid a fee. \hline In some instances, life insurance can help replace a portion of the household income your spouse, partner or children will lose if you pass away. I still don't understand Advertisement jabushaban729 Answer: protection Explanation: Advertisement Advertisement b. protection from creditors and lawsuits. You can learn more about the standards we follow in producing accurate, unbiased content in our. LESSON 1: BASIC PRINCIPLES OF LIFE AND HEALTH INSURANCE and THE INSURANCE INDUSTRY 1.1 The Role of Insurance The function of insurance is to safeguard against financial loss by having the "losses of the few" paid by "contributions of the many" that are exposed to the same risk. A person's suitcase was stolen and valuables were lost. For example, a person might approach an insurer for protection against house fires. b. living benefits D. 6-Chloroplast, Please help me calculate the increase in water, energy released in joules and energy released by 1g of bread in joules. Claims processing begins when a healthcare provider has submitted a claim request to the insurance company. This site is using cookies under cookie policy . Answer: Its aim is to reduce financial uncertainty and make accidental loss manageable. Major downturns in the economy Even if you have savings, it's unlikely that it would be enough to cover your family's expenses for several years or even decades if something happens to you . The primary function of insurance is to maintain your existing level of wealth by protecting you against potential financial losses or liability as a result of unexpected events. : the business of insuring persons or property b : a contract by which someone guarantees for a fee to pay someone else for the value of property if it is lost or damaged (as through theft or fire) or to pay usually a specified amount for injury or death c : the amount for which something is insured 2 : a means of guaranteeing protection d. the chance of loss. c. viatical settlement Insurance is a contract in which an insurer indemnifies another against losses from specific contingencies or perils. c. risk assessment of supplemental retirement income, and the payoff of mortgages. b. universal c. Introversion. Suppose D'Leon broke even in 201620162016 in the sense that sales revenues equaled total operating costs plus interest charges. Insurance plans are beneficial to anyone looking to protect their family, assets/property and themselves from financial risk/losses: Insurance plans will help you pay for medical emergencies, hospitalisation, contraction of any illnesses and treatment, and medical care required in the future. \text{Lease payments} &\$ 40,000& \$ 40,000\\ The insurance company changes its policies after property damage occurs. Step 1: Gather Information Needed For Your Claim. REAL PROPERTY and 2. Whole life insurance is permanent life insurance that pays a benefit upon the death of the insured and is characterized by level premiums and a savings component. The purpose of property insurance is to protect policyholders against losses to their 1. b. choice of how the accumulation account is invested Risk is uncertainty regarding economic loss. e. needs analysis. Risks come in two basic forms, pure risk and speculative risk. Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The least expensive form of whole life insurance protection is a. term \text { Percent collected in the month after the sale } & \quad 68 \\ Complete the given statement with one of the terms listed here. \textbf{Customer} & \textbf{Amount}\\ \text{Balances, December 31}, 2016& 100,000& \$460,000 &\$ 32,592& \$ 492,592\\ That company still exists today. AgingClass(NumberofDaysPastDue)030days3160days6190days91120daysMorethan120daysTotalreceivablesReceivablesBalanceonDecember31$480,000100,00040,00025,0005,000$650,000EstimatedPercentofUncollectibleAccounts1%3203040. Can someone be denied homeowners insurance? What type of life insurance will give them the most protection for their money? e. all of the above. Check all that apply. b. multiple earnings Answer the question to help you recall what you have read. Having health insurance provides a safety net in case you end up with a serious injury or illness: All non-grandfathered, non-grandmothered major medical health insurance plans will cap your in-network out-of-pocket costs (a combination of copays, deductibles, and coinsurance) at no more than an amount determined by CMS each year, regardless of . Insurance is a tool that can lessen ____ risk. The primary purpose of life insurance is to protect family members financially after one's death. Negotiating a Settlement With an Insurance Company. In the homeowner example, if the owner bought two $250,000 policies on his home from different companies, and a fire occurred that was covered under both policies, the owner files a claim with one company. a. Myers-Briggs indicator. In what circumstance would a property insurance claim be rejected? a. continuous premium 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. a. flexible premiums Risk. Insurance underwriting got its name from the practice, in 17th century England, of private investors signing their names as guarantors, for a fee, under posted listings of marine voyages and cargoes. Transfer of risk also is referred to as spreading the risk: because the large losses of a few are distributed through an insurer to a large number of premium payers, each of whom pays a relatively small amount. \text{Payment of cash dividends}& (11,000)\\ He must pay $75 each month for the plan.Later that month, Nelson caused a car accident when he lost control of his vehicle. b. the value of the loss. The insured party must file a claim. As with any other investment professional, be sure to verify that the person offering you insurance is properly licensed. In return, the insurer pays for the financial damages in case of any harm to the insured person or object. Refer to the case related to Satyam. d. non-convertibility. These contracts require policyholders to identify and describe the property that is c View the full answer Transcribed image text: What are the basic principles of property insurance? For instance, whole life insurance may or may not be the right type of life insurance for you. A person has contracted the flu and needs a prescription. Instead of paying out of pocket for auto accidents, people pay annual premiums to an auto insurance company; the company then pays all or most of the costs associated with an auto accident or other vehicle damage. e. none of the above. Increasing the deductible is likely to lower the premium on a comprehensive major medical policy. They are doing well financially but their life insurance needs are high and their budget is tight. nie chce mi sie tego robic batman lidia gra w, Case Study: Personal Financial Planning 1, Fundamentals of Financial Management, Concise Edition. c. changed to health or disability protection The insured (sometimes called the assured) is the one who receives the payment, except in the case of life insurance, where payment goes to the beneficiary named in the life insurance contract. $200,000 to Jack It is probably the single most important part of an academic paper. e. all of these. Today, home owners, car owners, businesses and institutions have available to them a wide range of insurance products, many of which have become a necessity for the functioning of a free-enterprise economy. b. death benefits for survivors. d. term insurance. Term life insurance is characterized by In such cases, the third-party's insurance should be compensating for the losses and not the other way around! With regard to health insurance, people who have chronic health issues or need regular medical attention should look for policies with lower deductibles. e. contains no tax benefits. \text{Accruals}& 489,600 &136,000\\ 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. 200, 50, Chapter 23: Male Genitalia & Rectal Assessment, Netcashprovidedbyoperatingactivities, Additionstoproperty,plant,andequipment, Netcashprovidedbyfinancingactivities, Totaloperatingcostsexcludingdepreciationandamortization, Addition(subtraction)toretainedearnings, Fundamentals of Financial Management, Concise Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Daniel F Viele, David H Marshall, Wayne W McManus. Why Do Insurance Policies Have Deductibles? 221%of82, The basic purpose of insurance is to provide, If two people are invited to invest and become partners in a business, the business owners will then___ the risk. \text { Income from operations } & 25,000 & 16,000 \\ a. the state The purchase of insurance is a common form of _____ by the insured. The FDIC, for example, claims in its mission statement to "maintain stability and public confidence in the nation's financial system." e. whole life. \end{array} \text{Increase in inventories}& (572,160)\\ What Determines the Price of an Auto Insurance Policy?, Insurance Information Institute. increasing availability of health care protection The insured party must purchase property. Insurance is a tool that can lessen ________ risk. c. limited payment Workers' compensation is a state program that provides benefits for, Workers suffering injury or illness on the job. Fire insurance covers damage and losses caused by fire and is often purchased in addition to standard homeowners insurance. Sometimes, claim requests are directly submitted by medical billers in the healthcare facility and sometimes, it is done through a clearing house. \text{Total assets} &\$2,866,592& \$1,468,800\\ Interest only A grace period permits the policyholder to retain full protection for usually _____ after missing a payment. Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because. e. none of the above. The basic purpose of insurance is to protect you from losses protect your health protect your income shield you from bad decisions Question 2 (1 point) Spreading risk among a large number of people is a major principle of insurance. 4. liability. The Third-Party Administrator Desk or TPA desk is a support system that most hospitals have. Virtually all mortgage companies require borrowers to have insurance coverage for the full or fair value of a property (usually the purchase price) and wont make a loan or finance a residential real estate transaction without proof of it. PercentcollectedinthemonthofsalePercentcollectedinthemonthafterthesalePercentcollectedinthesecondmonthafterthesale25685. d. savings. \text{EPS} &(\$ 1.602) & \$ 0.880\\ 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. e. premium reductions. d. special purpose insurance. Auto insurance is purchased by vehicle owners to mitigate costs associated with getting into an auto accident. The basic purpose of insurance is to provide: In the New World, the first fire insurance firm was formed in 1735 but lasted a scant five years. \text{Tax rate} & 40.00\% & 40.00\%\\ ________ is a factor in rising health care costs. b. \text { August } & 300,000 Assume that you are Jamison's assistant. 1- Nucl You can verify FINRA registration by visiting BrokerCheck or contacting your state securities commissioner. the highest payout by an insurer a. \text{Total liabilities and equity} &\$2,866,592 &\$1,468,800\\ d. premium refunds. A multitude of different types of insurance policies is available, and virtually any individual or business can find an insurance company willing to insure themfor a price. A person was in a car accident and cannot work for several months. We're looking for Junior Quality . e. reduce insurance premiums. \textbf{Liabilities and Equity}\\ e. Shifts in the macro-social structure of the population. The primary purpose of life insurance is to provide: financial security for dependents in the event of death. d. needs analysis Her husband, Jack, was the primary beneficiary and their children, Mimi (age 24) and Ann (age 30), were the contingent beneficiaries. In what circumstance would a property insurance claim be rejected? b. d. a provision for a secondary beneficiary. technological improvements The core components that make up most insurance policies are the deductible, policy limit, and premium. \text{Accounts payable} &\$ 524,160 &\$ 145,600\\ \textbf{Financing Activities}\\ Variable life insurance if most often the best plan for most people's primary insurance needs. c. risk assumption. What type of risk management is this an example of? Indemnity is a very important principle of insurance and stems form the value of the insurable interest. \text{Increase in notes payable}& \$ 436,808\\ Regulation of life insurance varies. a. settlement options. The company pools clients' risks to make payments more affordable for the insured. b. straight life. \text{Net cash used in investing activities} &(\$ 711,950)\\ e. Disclaimer, Which type of settlement option pays the beneficiary over a specified time frame? Discover more about it here. b. emphasize the savings portion while still having death protection. Nonforfeiture rights guarantee that a policyholder will not lose his or her ____. $100,000 each to Mimi and Ann With modem insurance, however, rather than literally distributing cargoes among a number of ships, merchants and shipowners find it more convenient to spread the monetary costs of any losses among many merchants and shipowners through the use of financial agreements. Thus, misfortunes that could be crushing to one can be made bearable for all. \text{Cash at beginning of year} &57,600\\ For the most recent year presented in your proxy, what was the total annual compensation received by the chairman and CEO of the company. Although the theoretical purpose of insurance may be protection from catastrophic events, a more common function of health insurance in the United States is far more akin to a club membership than car insurance. People are less worried when they know they have protection from risk. If a life insurance policy pays dividends, it is said to be. The purpose of this principle is to set back the insured to the same financial position that existed before the loss or damage occurred. The primary purpose of life insurance is to provide Graph f(x)f(x)f(x) and locate \mu and the interval 2\mu \pm 2 \sigma2 on the graph. 2.prevention. Technically, the basic function of property/ casualty insurance is the transfer of risk. 65 days It helps to protect the insured person or their family. How he can avoid risk? \text { Cost of goods sold } & 144,000 & 127,000 \\ True False Previous question Next question e. revised as needed. Many airline passengers purchase a special life insurance policy frequently sold at the airport. In simple words, insurance is a contract, a legal agreement between two parties, i.e., the individual named insured and the insurance company called insurer. decrease), what will be the operating margin percentage if sales increase by 25%? In this respect, insurers perform a capital formation function similar to that of banks. d. paid-up insurance option d. Renewable Report a concern about FINRA at 888-700-0028, Securities Industry Essentials Exam (SIE), Financial Industry Networking Directory (FIND), National Association of Insurance Commissions (NAIC) Consumer Information, Understanding Structured Notes With Principal Protection, Are You Staying Cyber Safe? An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. As with other financial products, insurance products can be complex and come with fees, so it pays to do your homework before you buy. A. Be sure your investment professional fully understands your financial situation and goals before you purchase an insurance policy. d. term life The insurance company finds that a homeowner intentionally caused damage. part of the premium for workers and dependents. The insured party must file a claim. It was Benjamin Franklin who got fire insurance off to its real startin 1752with the successful formation of the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. &2016& 2015\\ protection. Technically, the basic function of property/ casualty insurance is the transfer of risk. Bennett Inc. found that about 15%15 \%15% of its sales during the month were for cash. c. try to prevent losses. Roland has purchased a new tablet. d. multiple premium It helps to protect the insured person or their family against financial loss. To check insurance licensing, contact your state insurance commissioner. As a result, Watkins was informed that changes would have to be made-and quickly; otherwise, he would be fired. When you buy insurance, you purchase protection against unexpected financial losses. You must help her answer the following questions for Campo. There are also insurance policies available for very specific needs, such as kidnap and ransom (K&R), medical malpractice, and professional liability insurance, also known as errors and omissions insurance. 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. Watkins believed that D'Leon's products were of higher quality than the competition's; that this quality differential would enable it to charge a premium price; and that the end result would be greatly increased sales, profits, and stock price. a. \text{Total current liabilities} &\$1,650,568& \$ 481,600\\ The insured party must experience a covered loss. The insurance company reviews the claim for its validity and then pays out to the insured or requesting party (on behalf of the insured) once approved. the insured, by paying a definite amount, in exchange for an adequate consideration called as premium. Contribution 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. The purchase of insurance is a common form of which risk management technique: From the standpoint of the person buying insurance, the central purpose of insurance should be: Which of the following types of policies is most likely to allow you to switch investments? Step 2: File Your Personal Injury Claim. b. sex. b. increase rewards. A person was in a car accident and cannot work for several months. \textbf{Aging Class (Number} & \textbf{Receivables Balance} & \textbf{ Estimated Percent of}\\ Lets look at the most important. SalesCostofgoodssoldOtherexpensesTotaloperatingcostsexcludingdepreciationandamortizationDepreciationandamortizationEBITInterestexpenseEBTTaxes(40%)NetincomeEPSDPSBookvaluepershareStockpriceSharesoutstandingTaxrateLeasepaymentsSinkingfundpayments2016$6,034,0005,528,000519,988$6,047,988116,960($130,948)136,012($266,960)(106,784)($160,176)($1.602)$0.110$4.926$2.25100,00040.00%$40,00002015$3,432,0002,864,000358,672$3,222,67218,900$190,42843,828$146,60058,640$87,960$0.880$0.220$6.638$8.50100,00040.00%$40,0000, CommonStockRetainedTotalStockholdersSharesAmountEarningsEquityBalances,December31,2015100,000$460,000$203,768$663,7682016Netincome(160,176)Cashdividends(11,000)Addition(subtraction)toretainedearnings(171,176)Balances,December31,2016100,000$460,000$32,592$492,592\small{ a. age. liquidity to expand business operations. d. guaranteed purchase There are many types of insurance policies. c. Lifetime income e. the insurance company keeps the proceeds. 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. a. has no incontestability clause. \text{Depreciation and amortization}& 116,960 &18,900\\ Consumer Financial Protection Bureau. Life insurance policies will vary greatly among companies, which offer many different types of coverage and prices. Travel insurance is a type ofinsurance thatcovers the costs and losses associated with traveling. Through insurance, society is able to Why does insurance often provide "peace of mind"? The fundamental purpose of insurance is to spread out the risk of individual investments among many parties to reduce the risk to any individual member of the pool in the event that an investment fails. Based on this profile, the insurer will establish a monthly premium. How long is the grace period for health insurance policies with monthly due premiums? c. Mortgage life; industrial life Or to help with big, long-term expenses, like your kids' education. c. health status. It can also provide a measure of, is insurance purchased to provide protection against the claims of others suffering losses for, which the insured is considered to be at least partly to blame. b. the probate court \text{Net cash provided by operating activities}& (\$ 164,176)\\ It lowers the payout the company has to make. The main purpose of life insurance is to cover for the loss of income your family will experience if you die, help them pay for burial expenses and provide an income so they have some economic security. term life insurance 20, 5 The insured makes regular payments. d. change financial risks and reduce losses. What Is Auto Insurance?, Battleface. Many types of life insurance are available. True t/f Deciding to sell a motorcycle would be an example of risk sharing. Job expenses are estimated to be $1,096 per year at ABM and$636 per year at Zeda. Insurance Ensures Family and Business Stability Insurance is a safety net for when risks go wrong. b. mortgage life insurance. \text { Retained earnings } & 47,000 & 16,000 \\ and to insure individuals against sickness, disability, and death. \text { Percent collected in the month of sale } &25 \\ 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. This case provides opportunities to analyze the proxy of a publicly held company and to survey the types of information presented in the proxy. What is insurance? b. is a form of endowment insurance. c. limited pay The probability of a loss occurring can be reduced by ____ can be both an advantage and a disadvantage of universal life insurance. Policies with very high deductibles are typically less expensive because the high out-of-pocket expense generally results in fewer small claims. In others, it can help cover funeral expenses or other debts. a. a. b. exchanged for cash. c. 90 days &2016 &2015\\ He has purchased a face value of $100,000 and can accumulate cash value. \text { July } & 295,000 \\ Again for the sake of convenience, these agreements usually take the form of an insurance policy, with insurance underwriters or an insurance company acting as financial intermediary. 50, 10 When the automobile came along, insurance wasnt far behindto provide financial protection and peace of mind to car owners whose accidents, though few in the early days, nevertheless could be costly. a. An insurance claim is a formal request to an insurance company asking for a payment based on the terms of the insurance policy. They come in various forms, including term life, whole life and universal life policies. e. all of the above. a. level annual premiums throughout life. The insurance company finds that a homeowner intentionally caused damage. c. Cash value b. True He was required to pay the first $500 of his repair costs, and then the insurance company covered the rest. d. $66,666 each to Jack, Mimi, and Ann tax-advantaged investments. 31 days d. industrial \text{Stock price} & \$ 2.25 &\$ 8.50\\ e. separate identification of death protection and savings portions, Henry must make set premium payments on his insurance policy until he dies, and if he cancels the policy he will receive the cash value. \text{Gross fixed assets}& 1,202,950& 491,000\\ Insurance concepts .pdf - Module 7: INSURANCE CONCEPTS AND LIFE INSURANCE Objectives To learn about the basics of insurance To gain, risk, speculative risk, perils and hazards, If you risk nothing, then you risk everything., One of the basic tenets of financial planning is the accumulation of assets. 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Consideration called as premium for instance, whole life and universal life policies mind?... Availability of health care costs on this profile, the insurer will establish a monthly premium & # x27 education! Accidental loss manageable c. risk assessment of supplemental retirement income, and premium e. in. You have read the insurer will establish a monthly premium by 25 % or their family against financial loss protection! Contract in which an insurer indemnifies another against losses from specific contingencies or perils settlement insurance is a tool can... Policy frequently sold at the airport you have read them the most protection for their money most insurers paying... When you buy insurance, society is able to recuperate with most insurers, paying life insurance for you assume! This principle is to reduce financial uncertainty and make accidental loss manageable & 144,000 & \\... 144,000 & 127,000 \\ true False Previous question Next question e. revised as Needed or to help you what! Would a property insurance claim be rejected the purpose of this principle is to the. Costs, and death 1,096 per year at Zeda TPA Desk is a formal request an! Losses from specific contingencies or perils financial losses to reduce financial uncertainty and make accidental loss.... True He was required to pay the first $ 500 of his repair costs, and death premiums rather pay... Fully understands your financial situation and goals before you purchase protection against house.! Has submitted a claim request to an insurance policy frequently sold at the airport the basic purpose of insurance is to: specific or... Frequently sold at the airport insurance needs are high and their budget is tight with to! Then the insurance policy specific contingencies or perils policy pays dividends, It is probably single. Suffering injury or illness on the job auto insurance is a state program that provides for... Submitted a claim request to the same financial position that existed before the or. Less expensive because the high out-of-pocket expense generally results in fewer small claims before the loss or damage.... Travel insurance is a tool that can lessen ____ risk vary greatly among companies, which offer many different of! That sales revenues equaled Total operating costs plus interest charges keeps backup funds in a car accident can... You to avoid a fee 18,900\\ Consumer financial protection Bureau of Its during... He has purchased a face value of the costs and losses associated with getting into an accident! The savings portion while still having death protection including term life, whole life insurance is a very important of! Mitigate costs associated with getting into an auto accident same financial position that before...
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