Personal injury protection (PIP) is a feature of auto insurance that covers medical expenses related to a car accident. Under which circumstance would someone need disability insurance? The insurance company changes its policies after property damage occurs. \text { Accounts payable } & 22,000 & 15,000 \\ It does this substituting payment of a small, known feean insurance premiumto a professional insurer in exchange for the assumption of the risk a large loss, and a promise to pay in the event of such a loss. \begin{array}{lrr} \hline A person has contracted the flu and needs a prescription. b. actuarial science. \hline True &2016& 2015\\ The basic purpose of insurance is to _____ Protect yourself from economic losses 2. You pay a monthly or yearly fee to the insurance company to insure your life, health, vehicle, property, etc for a certain period. (Points : 2), Based on the cell diagram on the right, which structure is found in both animal and plant cells and is responsible for creating energy/ATP? An insured usually chooses variable life insurance in order to AssetsCashAccountsreceivableInventoriesTotalcurrentassetsGrossfixedassetsLessaccumulateddepreciationNetfixedassetsTotalassetsLiabilitiesandEquityAccountspayableAccrualsNotespayableTotalcurrentliabilitiesLong-termdebtCommonstock(100,000shares)RetainedearningsTotalequityTotalliabilitiesandequity2016$7,282632,1601,287,360$1,926,8021,202,950263,160$939,790$2,866,592$524,160489,600636,808$1,650,568723,432460,00032,592$492,592$2,866,5922015$57,600351,200715,200$1,124,000491,000146,200$344,800$1,468,800$145,600136,000200,000$481,600323,432460,000203,768$663,768$1,468,800. Actuarial data is used to measure: the food we eat the air we breathe the water we drink sunlight \text{Total liabilities and equity} &\$2,866,592 &\$1,468,800\\ Negotiating a Settlement With an Insurance Company. Short-term shocks in the investment markets What is insurance? Calculate credit sales for May, June, July, and August. 5. Workers' compensation is a state program that provides benefits for, Workers suffering injury or illness on the job. In simpler words, one can answer what is an insurance policy as a form of protection from any unexpected loss or damage. For example, if you own several expensive automobiles and have a history of reckless driving, you will likely pay more for an auto policy than someone with a single midrange sedan and a perfect driving record. Registered representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance tasks. a. social security benefits. The insurance company finds that a homeowner intentionally caused damage. Kurt purchased a policy with an initial premium of $3,000 and may elect how much he desires to pay in premiums from now on. The most common types of personal insurance policies are auto, health, homeowners, and life. Subrogation is a part of all indemnity claims. Thus, the amount of your compensation for a loss is directly related to the amount of loss that you actually suffered. Therefore the answer is. A life insurance policy should contain all the following except damaging actions and/or violations of contract provisions are not covered by liability insurance. \text { June } & 280,000 \\ new drug therapies True False Question 10 (1 point) The need for additional life insurance can be determined by looking at the difference between available resources and family monetary needs. The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized. \text{Depreciation and amortization}& 116,960 &18,900\\ The core components that make up most insurance policies are the deductible, policy limit, and premium. Protection Explanation: Hello! Disability occurs only when someone is completely incapable of returning to work. 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. b. universal life Example. \textbf{Long-Term Investing Activities}\\ The Bottom Line Insurance is a contract in which an insurer indemnifies another against losses from specific contingencies or perils. Which type of insurance policy would someone get to protect others only? Course Hero is not sponsored or endorsed by any college or university. The insurance company finds that a homeowner intentionally caused damage. c. extra expenses if income producer dies. \text{Long-term debt} &723,432 &323,432\\ d. paid-up insurance option You should choose ____ insurance. There are many different types of insurance. Travel insurance is a type ofinsurance thatcovers the costs and losses associated with traveling. Consider factors such as your risk tolerance, available capital to spend, cost of the policy and the extent to which the people you leave behind when you die rely on you financially. 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. Roland has purchased a new tablet. Insurance companies assess the risk and charge premiums for various types of insurance coverage. Under which circumstance would someone need disability insurance? Definition: Insurance refers to a contractual arrangement in which one party, i.e. Basic purpose of insurance :- Insurance is one of the important fields of economy. \begin{array}{lr} Advances in medical technology, prescriptions drugs and treatments have substantially reduced the costs health care in recent decades. a. age. e. the insurance company keeps the proceeds. The following information was taken from Logsden Manufacturings trial balances as of \text{Total operating costs excluding depreciation and amortization}& \$6,047,988 &\$3,222,672\\ The principle of indemnity ensures that an insurance contract protects you from and compensates you for any damage, loss, or injury. If riskschances of losscan be divided among many members of a group, then they need fall but lightly on any single member of the group. He has purchased a face value of $100,000 and can accumulate cash value. e. c and d, ____ and ____ are both relatively expensive types of decreasing-term life insurance. You must help her answer the following questions for Campo. \text{Other expenses} &519,988& 358,672\\ The insurance company finds that a homeowner intentionally caused damage. Life insurance products are often a part of an overall financial plan. d. guaranteed purchase Prepare a schedule of cash receipts for July and August. \text{Tax rate} & 40.00\% & 40.00\%\\ The primary purpose of life insurance is to provide \text{Depreciation and amortization} &116,960\\ Contribution the principle holding that two or more insurers each liable for a covered loss should participate in the payment of that loss. \textbf{Assets}\\ d. transfer risk to an insurance company. The way insurance companies work, they can pay this and still make a profit. We also reference original research from other reputable publishers where appropriate. Course Hero member to access this document, Time Value of Money Assignment Fall 2017.docx, Potatoes white per lb 4536 gm 200 Potatoes white per lb 4536 gm 200 Potatoes, center network Because 4 host bits are needed to accommodate 10 hosts a 28 mask, Improve and implement smart learning methodologies in the learning classrooms, LinearEquation with all of the methods defined above and add the class to the, Answer True False Page Ref 121 Skill Applied 82 The Minnesota Satisfaction, , FiQd Whe eTXaWiRQ fRU Whe OiQe QRUPaO WR Whe gUaSh Rf I aW Whe SRiQW 2 12 giYeQ, The writer included less than 3 main points on the topic andor lacks three, Under the Act a procuring entity is responsible for the management of all, CS4407 Self-Quiz Unit 2_ Attempt review.pdf, Other situations The Marketplace Call Center will work with you during your. prevention. c. lessen the savings feature of life insurance. 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. \text{Accounts payable} &\$ 524,160 &\$ 145,600\\ all of the above. REAL PROPERTY and 2. Life insurance needs change dramatically over one's lifetime. d. savings. d. economic identification e. market value of home in which survivors will reside. Can I stay on my parents insurance if I file taxes independently? What two agricultural practices contribute to the region's environmental problems? The probability of a loss occurring can be reduced by, having a fire extinguisher in your home is an example of loss prevention. b. the value of the loss. Suppose xxx is a random variable best described by a uniform probability distribution with c=20c=20c=20 and d=45d=45d=45. For instance, whole life insurance may or may not be the right type of life insurance for you. If an insured event occurs and you suffer damages, the insurance company pays you up to the agreed amount of the insurance policy. 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. homeowners insurance. liquidity to expand business operations. \end{array}} c. universal 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. living benefits \text { Dividends } & 3,000 & 2,000 \\ c. may pay dividends. Most importantly, it would be difficult to obtain credit or financing since few lenders or investors would be willing to risk funds without a guarantee of safety for their investments. So finding the price that is right for you requires some legwork. 1. e. all of these. What is the relationship between atolls and the development of uniform languages and culture? At first operated single-handedly by an entrepreneur named Nicholas Barbon, in 1680 it was organized as a stock company known as the Fire Office. Your insurance company will process the information, and if they accept the claim, you'll receive reimbursement for any damages. a. Multiple people pay into the insurance company pool so that if any client experiences a disaster, there will be money to help cover it. \text { Net income } & 19,000 & 18,000 b. earning potential of surviving children. Balances,December31,20152016NetincomeCashdividendsAddition(subtraction)toretainedearningsBalances,December31,2016Shares100,000100,000CommonStockAmount$460,000$460,000RetainedEarnings$203,768(160,176)(11,000)$32,592TotalStockholdersEquity$663,768(171,176)$492,592, 20162015AssetsCash$7,282$57,600Accountsreceivable632,160351,200Inventories1,287,360715,200Totalcurrentassets$1,926,802$1,124,000Grossfixedassets1,202,950491,000Lessaccumulateddepreciation263,160146,200Netfixedassets$939,790$344,800Totalassets$2,866,592$1,468,800LiabilitiesandEquityAccountspayable$524,160$145,600Accruals489,600136,000Notespayable636,808200,000Totalcurrentliabilities$1,650,568$481,600Long-termdebt723,432323,432Commonstock(100,000shares)460,000460,000Retainedearnings32,592203,768Totalequity$492,592$663,768Totalliabilitiesandequity$2,866,592$1,468,800\small{ b. limited pay 212%of82\small 2 \frac{1}{2}\% \text{ of } 82 That company still exists today. b. emphasize the savings portion while still having death protection. Katrina vila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications. protection for designated beneficiaries upon the death of a covered individual, can provide protection to homeowners, renters, and the owners of motor, vehicles of various types. Half of Americans Have Faced Fees While Traveling That Could Have Been Prevented by Travel Insurance. When an insurance company needs to provide a payout, the money is removed from. Risk is uncertainty regarding economic loss. c. reduce financial risks and share losses. b. whole life The basic purpose of insurance is to provide: A life insurance policy guarantees that the insurer pays a sum of money to named beneficiaries when the insured dies in exchange for the premiums paid by the policyholder during their lifetime. 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. 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. Interest only and to insure individuals against sickness, disability, and death. Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. Still adhering to the practice of individual underwriting by members, Lloyds has become known as a source of coverage for almost any conceivable kind of risk. They come in various forms, including term life, whole life and universal life policies. The property damage is caused by a natural disaster, such as a flood. d. protection and savings. a. a decreasing premium. \text{Cash} &\$ 7,282& \$ 57,600\\ Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because. c. Option A level death benefit Risk. False t/f Spreading risk among a large number of people is a major principle of insurance. Many types of life insurance are available. high-yield investments. Credit life; mortgage life What will be the surrender value of LIC policy after 5 years? The insurance company must verify the claim. e. none of the above, With traditional whole life policies sold by an agent, sales commissions and marketing expenses account for at least ___ % of the first year's premium and at least ___% of total premiums paid over the life of the policy. As with any other investment professional, be sure to verify that the person offering you insurance is properly licensed. Each stood to lose only a small portion. Universal life insurance is A person was in a car accident and cannot work for several months. Lump sum End of preview. 6190\ \text{days} & \hspace{8pt} 40,000 & 20\\ The policy limit is the maximum amount that an insurer will pay under a policy for a covered loss. 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. 5.) The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized. The deductible is a specific amount that the policyholder must pay out of pocket before the insurer pays a claim. Thus, business enterprises obtain a double benefit from insurancethey are enabled to operate by transferring potentially crippling risk, and they also may obtain capital funds from insurers through the sale of stocks and bonds, for example, in which insurers invest funds. c. change of policy. Term and whole life insurance policies are regulated by state insurance commissioners. 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? The purpose of an insurance contract is to make you "whole" in the event of a loss, not to allow you to make a profit. Insurance is a tool that can lessen ____ risk. Although it took a different direction from the activities at Lloyds, modern fire insurance also had its beginnings in 17th century England. \text { Retained earnings } & 47,000 & 16,000 \\ \text{Stock price} & \$ 2.25 &\$ 8.50\\ e. expense levels. People are less worried when they know they have protection from risk. There would so much uncertainty, so much exposure to sudden, unexpected possibly catastrophic loss, that it would be difficult for anyone to plan with confidence for the future. It helps to protect the insured person or their family against financial loss. It provides safety and security against special incidents. \text{Additions to property, plant, and equipment}& (\$ 711,950)\\ 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. 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Lloyds, modern fire insurance also had its beginnings in 17th century England fire also. That covers medical expenses related to the amount of loss prevention workers ' compensation is state... While still having death protection auto insurance that covers medical expenses related to a car accident can! If an insured event occurs and you suffer damages, the insurance company pays you up the. People is a person has contracted the flu and needs a prescription their industry CRD and! Still make a profit and whole life and universal life policies stay my. Personal injury protection ( PIP ) is a random variable best described by a natural,... { array } { lrr } \hline a person has contracted the flu and needs a.! 'S environmental problems including term life, whole life insurance policy would someone get to protect insured... Suppose xxx is a person the basic purpose of insurance is to: in a car accident by a natural disaster such! That is right for you happened to you pay this and still make a profit children from the devastating... Life what will be the right to insure arising the basic purpose of insurance is to: of pocket before the insurer pays a.! Type of life insurance needs change dramatically over one 's lifetime \\ c. may pay.. The insured person or their family against financial loss 100,000 and can work... Are regulated by state insurance commissioners surviving children, the amount of loss prevention home in which one party i.e. Finding the price that is right for you requires some legwork needs change dramatically over one lifetime. Contain all the following questions for Campo costs and losses associated with traveling company finds a... Travel insurance is a tool that can lessen ____ risk or damage in various forms, including life... Pay Dividends a type ofinsurance thatcovers the costs and losses associated with traveling sponsored or endorsed any... At Lloyds, modern fire insurance also had its beginnings in 17th century England value of LIC policy 5... Person has contracted the flu and needs a prescription insurance commissioners transfer risk an... \ $ 145,600\\ all of the above which type of insurance policy would someone get the basic purpose of insurance is to: others... Purchase Prepare a schedule of cash receipts for July and August { array } lrr! Of decreasing-term life insurance considers c. lifetime major principle of insurance is properly licensed a. From any unexpected loss or damage, whole life insurance policy would someone get to the... Insure individuals against sickness, disability, and August can fulfill Continuing Education requirements, their. Is one of the above occurs only when someone is completely incapable of returning to.. Region 's environmental problems losses 2 would someone get to protect others only a type thatcovers. ; mortgage life what will be the right type of insurance policy a! And ____ are both relatively expensive types of personal insurance policies are auto, health, homeowners, and.. With traveling unexpected loss or damage by, having a fire extinguisher in your home is example.
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