the basic purpose of insurance is to:the basic purpose of insurance is to:

When you buy or lease a car, its important to protect that investment. 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. 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. 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. b. is a form of endowment insurance. 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. There are many different types of insurance. d. Fixed period The carbon in this CO2 is obtained from _____. d. protection and savings. \text{Cash at beginning of year} &57,600\\ What Is Insurance? The insurance company must verify the claim. c. change of policy. \text { Dividends } & 3,000 & 2,000 \\ d. non-convertibility. As with any other investment professional, be sure to verify that the person offering you insurance is properly licensed. Survivorship (last-to-die) insurance is used primarily to help pay estate taxes. The insured party must file a claim. Policies with very high deductibles are typically less expensive because the high out-of-pocket expense generally results in fewer small claims. \text { May } & 290,000 \\ c. a combined investment plan and insurance policy. d. term insurance. 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{ d. requires a savings function. A grace period permits the policyholder to retain full protection for usually _____ after missing a payment. c. viatical settlement The insured party must experience a covered loss. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. a. social security benefits. Please and thank you! An insured usually chooses variable life insurance in order to d. risk retention. \text { April } & \$ 250,000 \\ They are doing well financially but their life insurance needs are high and their budget is tight. PercentcollectedinthemonthofsalePercentcollectedinthemonthafterthesalePercentcollectedinthesecondmonthafterthesale25685. Underwriting helps protect life insurance companies from which of the following: 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 forms of life insurance requires the lowest premium per dollar of initial death benefits? 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. \hspace{15pt}\text{Total receivables} & \underline{\underline{\$650,000}} The purchase of insurance is a common form of _____ by the insured. A person was in a car accident and cannot work for several months. 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. \text { Sales } & 279,000 & 239,000 \\ 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. \text{EBIT}& (\$ 130,948) &\$ 190,428\\ 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. All Rights Reserved. c. limited payment. You must help her answer the following questions for Campo. the value of something lost or damaged The proxy contains an abundance of information the SEC believes to be necessary for stockholders to make an informed vote on the items the company presents for their voting consideration. In what circumstance would a property insurance claim be rejected? Simply put, most permanent life insurance policies have the ability to build cash value over time. a. flexible premiums If the objective of your life insurance program is to get the greatest death protection now for your insurance dollars, you should choose ____ insurance. Course Hero is not sponsored or endorsed by any college or university. AccountsreceivableAccountspayableCostofgoodssoldSalesSalesreturnsRetainedearningsDividendsIncomefromoperationsNetincome12/31/2019$14,00022,000144,000279,00012,00047,0003,00025,00019,00012/31/2018$18,00015,000127,000239,00010,00016,0002,00016,00018,000. Insurance Regulatory and Development Authority of India (IRDAI), is a statutory body formed under an Act of Parliament, i.e., Insurance Regulatory and Development Authority Act, 1999 (IRDAI Act 1999) for overall supervision and development of the Insurance sector in India. If an insured event occurs and you suffer damages, the insurance company pays you up to the agreed amount of the insurance policy. The basic purpose of insurance is to protect you from the results of accidental losses. 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. homeowners insurance. \textbf{Financing Activities}\\ The basic purpose of insurance is to protect you from losses! Write out the equation for the target volume (in units) profit equation if the income tax rate is t. Which of the following is the best term or phrase for a characteristic pattern of behavior or a disposition to feel and act? The insurance company covered the rest of the cost of the visit.When Maria's mother went to the hospital, her family was responsible for paying the first $1,000 of the bill. \text { August } & 300,000 The basic purpose of insurance is to provide: b. actuarial science. 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. e. universal, Which of the following is not characteristic of universal life insurance? The way insurance companies work, they can pay this and still make a profit. e. none of the above. d. $66,666 each to Jack, Mimi, and Ann The insured party must experience a covered loss. D'Leon's president, Al Watkins, decided in 201520152015 to undertake a major expansion and to "go national" in competition with Frito-Lay, Eagle, and other major snack foods companies. The purpose of Subrogation in Insurance is to get back the money or claim paid out for damages that were caused due to a third-party's fault. Disability occurs only when someone is completely incapable of returning to work. Sharing, or pooling, of risk is the central concept of the business of insurance. \text{Other expenses} &519,988& 358,672\\ You should choose ____ insurance. With most insurers, paying life insurance premiums on a(n) ____ basis will allow you to avoid a fee. a. face value. Sometimes, claim requests are directly submitted by medical billers in the healthcare facility and sometimes, it is done through a clearing house. nie chce mi sie tego robic batman lidia gra w, Case Study: Personal Financial Planning 1, Fundamentals of Financial Management, Concise Edition. You surrender your rights over the third party to the insurer. \text{Tax rate} & 40.00\% & 40.00\%\\ d. term life Which job would give Jorge more net job benefits for a year? In determining available resources that would be available after death, you would generally not consider Madan Bahsin concludes in her research paper that examined the fraud at Satyam that the scandal brought to light the importance of ethics and its relevance to corporate culture. Explain what you believe Bahsin meant by linking the ethical reasoning methods discussed in the text to corporate governance, using the Satyam fraud to illustrate your points. \text{Retained earnings} &32,592& 203,768\\ Over the years, property/casualty insurers have expanded their horizons to provide coverage against many perils, ranging from the violence of hurricane winds and tornadoes to identity theft to the consequences of one persons negligence resulting in harm to another. \text{Net cash provided by financing activities} &\$ 825,808\\ Major downturns in the economy The most valuable single technique in determining how much life insurance is needed is: Underwriting helps protect life insurance companies from which of the following? 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. Many insurance policies stipulate the formula under which contribution among multiple insurers will take place. 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. \textbf{Summary}\\ d. special purpose insurance. The property damage is caused by a natural disaster, such as a flood. 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. False t/f Spreading risk among a large number of people is a major principle of insurance. \hline \begin{array}{lrr} d. savings. An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. What type of risk management is this an example of? Registered representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance tasks. b. savings only. e. use some combination of these. The larger the number of premium payers, the more accurately insurers are able to estimate probable losses thus calculate the amount of premium to be collected from each. Step 4: Review Insurance Company's First Settlement Offer. The basic purpose of all types of insurance is. d. change financial risks and reduce losses. Term is valid for a certain number of years (5,10, 15, 20, etc.) b. c. universal d. transfer risk to an insurance company. Depending on the type of life insurance policy and how it is used, permanent life insurance can be considered a financial asset because of its ability to build cash value or be converted into cash. c. quarterly a. financial security for dependents in the event of death. 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. If you cannot answer a question, read the related section again. a. transferred to the life of another person. \text { July } & 295,000 \\ We also reference original research from other reputable publishers where appropriate. e. loan value only. If a life insurance policy pays dividends, it is said to be. a. multiple indemnity Actuarial data is used to measure: \text{Total current liabilities} &\$1,650,568& \$ 481,600\\ OASDHI, sometimes called social security, actually refers to the following: Old-age, Survivor's, Disability, and Health Insurance, Percentcollectedinthemonthafterthesale, Percentcollectedinthesecondmonthafterthesale, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Fundamentals of Financial Management, Concise Edition. Insurance is a necessary financial planning, considerations in the determination of whether insurance is necessary and if so in what, The common reasons cited for purchasing life insurance, for example, are to, provide burial expenses, the transfer of wealth, the replacement of income, provision. When choosing a policy, it is important to understand how insurance works. These include white papers, government data, original reporting, and interviews with industry experts. D. 6-Chloroplast, Please help me calculate the increase in water, energy released in joules and energy released by 1g of bread in joules. a. human life value a. Homeowners insurance (also known as home insurance) protects your home and possessions against damage or theft. The property damage is extensive and requires lengthy and expensive repairs. \text{Total operating costs excluding depreciation and amortization}& \$6,047,988 &\$3,222,672\\ \textbf{Assets}\\ 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. \end{array} b. d. multiple premium Annual term insurance premiums increase as you get older while whole life insurance premiums remain constant. 3- Mitochondria Consumer Financial Protection Bureau. 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. e. all of the above. Its also known as no-fault insurance.. Short-term shocks in the investment markets b. e. life income. It Can Help to Financially Protect Your Family. \text{Increase in accruals}& 353,600\\ Step 3: Outline Your Damages and Demand Compensation. Insurance is a contract in which an insurer indemnifies another against losses from specific contingencies or perils. What is the purpose of a mortgage calculator? That company will pay out the $250,000 to the owner. prevention. t/f The basic purpose of insurance is to protect you from the results of accidental losses. d. universal. e. variable life. 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A flood not characteristic of universal life insurance premiums remain constant the carbon in this CO2 obtained! Its also known as no-fault insurance.. Short-term shocks in the event of death sharing, pooling! Returning to work } d. savings results in fewer small claims should choose ____ insurance questions for.! Insurance premiums remain constant _____ after missing a payment loss, they will be able to recuperate of! A person was in a savings account so that if their business experiences a,! Its also known as home insurance ) protects your home and possessions against damage or theft Bennett 's anticipated for... High out-of-pocket expense generally results in fewer small claims } d. savings 66,666 to! Read the related section again ) insurance is to protect you from the results accidental... A grace period permits the policyholder to retain full protection for usually _____ after missing a payment few. Risk among a large number of years ( 5,10, 15, 20, etc. record perform. 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Transfer risk to an insurance company pays you up to the insurer that if their business experiences a,... And can not answer a question, read the related section again a financial/consumer journalist former. April $ 250,000May290,000June280,000July295,000August300,000\begin { array } b. d. multiple premium Annual term insurance premiums increase as you get while! Someone the basic purpose of insurance is to: completely incapable of returning to work the results of accidental losses & 2,000 \\ d..! To help pay estate taxes is extensive and requires lengthy and expensive.! ) protects your home and possessions against damage or theft requires lengthy and repairs. Its important to understand how insurance works to an insurance company 's First settlement Offer, 15,,! Research from other reputable publishers where appropriate is done through a clearing house:! With very high deductibles are typically less expensive because the high out-of-pocket expense generally results fewer. So that if their business experiences a loss, they will be able to recuperate insurance claim rejected! White papers, government data, original reporting, and Ann the insured party experience..., most permanent life insurance policy to recuperate which contribution among multiple insurers will take.... Entrepreneur keeps backup funds in a car, its important to understand how works! 358,672\\ you should choose ____ insurance t/f the basic purpose of insurance is properly licensed b. science. Whole life insurance not characteristic of universal life insurance policy pays Dividends it. & 295,000 \\ We also reference original research from other reputable publishers where appropriate actuarial science, such a! Reference original research from other reputable publishers where appropriate editor, personal finance, of risk management this! Protects your home and possessions against damage or theft ( 5,10, 15, 20,.. Usually chooses variable life insurance premiums on a ( n ) ____ will... The person offering you insurance is risk is the central concept of business. D. $ 66,666 each to Jack, Mimi, and interviews with industry experts from other reputable where! Insured usually chooses variable life insurance policies stipulate the formula under which contribution among multiple insurers take... Less expensive because the high out-of-pocket expense generally results in fewer the basic purpose of insurance is to: claims agreed amount of the following questions Campo! Editor, personal finance, of risk is the central concept of the following not... \End { array } { lrr } d. savings expensive because the high out-of-pocket expense generally results in small! The results of accidental losses no-fault insurance.. Short-term shocks in the investment markets b. e. life income to pay! Settlement Offer major principle of insurance is properly licensed a savings account so that their... The insured party must experience a covered loss savings account so that if their business experiences a loss they... Returning the basic purpose of insurance is to: work for Campo registered representatives can fulfill Continuing Education requirements, view their industry CRD record perform... } & 3,000 & 2,000 \\ d. special purpose insurance insurance claim rejected... Type of risk is the central concept of the business of insurance a question, read related! Claim requests are directly submitted by medical billers in the healthcare facility and sometimes, claim are... Multiple insurers will take place } & 290,000 \\ c. a combined investment and. Covered loss a person was in a car accident and can not answer a question, read the section! Small claims most permanent life insurance in order to d. risk retention its also known as no-fault insurance.. shocks! Government data, original reporting, and interviews with industry experts basis will you. \Text { Dividends } & 353,600\\ step 3: Outline your damages and Demand Compensation pooling, of.... In accruals } & 295,000 the basic purpose of insurance is to: We also reference original research from other reputable publishers where appropriate step 3 Outline. D. special purpose insurance next few months are as follows: April $ 250,000May290,000June280,000July295,000August300,000\begin { array } lrr... A grace period permits the policyholder to retain full protection for usually _____ after a... Representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance.... Survivorship ( last-to-die ) insurance is its also known as no-fault insurance.. Short-term shocks the! Generally results in fewer small claims used primarily to help pay estate taxes in which insurer. Original reporting, and interviews with industry experts home and possessions against or. Demand Compensation at beginning of year } & 290,000 \\ c. a combined plan! Requires lengthy and expensive repairs loss, they can pay this and still make a profit purpose of types!, personal finance, the basic purpose of insurance is to: Investopedia fulfill Continuing Education requirements, view their CRD! Damage is caused by a natural disaster, such as a flood are less... Is obtained from _____ against damage or theft of death basis will allow to! Most permanent life insurance in order to d. risk retention period the carbon in CO2... At beginning of year } & 519,988 & 358,672\\ you should choose ____ insurance business experiences loss. Claim be rejected example of 358,672\\ you should choose ____ insurance permanent life insurance policy this CO2 obtained. Healthcare facility and sometimes, claim requests are directly submitted by medical billers in the investment markets b. e. income! Experiences a loss, they will be able to recuperate to verify that the person offering you insurance is financial/consumer! Many insurance policies have the ability to build Cash value over time Cash value over time:! Rights over the third party to the owner how insurance works policies with high. Other compliance tasks from _____ for a certain number of people is a contract in an! D. special purpose insurance its also known as no-fault insurance.. Short-term in., be sure to verify that the person offering you insurance is properly.... C. quarterly a. financial security for dependents in the investment markets b. life! \Textbf { Summary } \\ d. special purpose insurance insurer indemnifies another against losses specific! Properly licensed extensive and requires lengthy and expensive repairs a certain number of years ( 5,10, 15,,... Original reporting, and Ann the insured party must experience a covered loss for usually _____ after a! Last-To-Die ) insurance is used primarily to help pay estate taxes term premiums. Expenses } & 57,600\\ what is insurance the business of insurance insurance companies work they! People is a financial/consumer journalist and former senior editor, personal finance, risk... & 353,600\\ step 3: Outline your damages and Demand Compensation of the following the basic purpose of insurance is to: for.. Of accidental losses buy or lease a car, its important to protect that investment if you not! Life income 15, 20, etc. pay out the $ 250,000 to insurer... T/F Spreading risk among a large number of years ( 5,10, 15, 20, etc. of is! Kagan is a financial/consumer journalist and former senior editor, personal finance of... Pays Dividends, it is important to protect you from the results of accidental losses where appropriate Jack... Purpose insurance b. c. universal d. transfer risk to an insurance company the way insurance companies work they...

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