the basic purpose of insurance is to:

a. the state \text{Net cash used in investing activities} &(\$ 711,950)\\ 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. mortgage life insurance. a. All three costs have been scaled so that a comparison can be made between them. 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? 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. The basic purpose of insurance is to __________. 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. \end{array} If you cannot answer a question, read the related section again. The deductible is a specific amount that the policyholder must pay out of pocket before the insurer pays a claim. The probability of a loss occurring can be reduced by, having a fire extinguisher in your home is an example of loss prevention. True False Previous question Next question d. universal. d. special needs of dependents. d. the chance of loss. b. universal life d. multiple premium tax-advantaged investments. \textbf{Summary}\\ In what circumstance would a property insurance claim be rejected? &2016& 2015\\ 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. Arbitration and mediation case participants and FINRA neutrals can view case information and submit documents through this Dispute Resolution Portal. It reduces consumers' co-payments. The Third-Party Administrator Desk or TPA desk is a support system that most hospitals have. The need was made plain when some 14,000 buildings were destroyed and 200,000 persons left homeless in a fire which raged through London in 1666. d. term life The property damage is caused by a natural disaster, such as a flood. The insured party must experience a covered loss. The underwriting function is designed to be sure that premiums are based on By the dictionary definition, insurance is the arrangement you make with a company or a state. c. Cash value a. a decreasing premium. b. loss prevention. \text { April } & \$ 250,000 \\ \text{More than}\ 120\ \text{days} & \hspace{12pt} \underline{5,000} & 40\\ c. whole life insurance. He was required to pay the first $500 of his repair costs, and then the insurance company covered the rest. 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. 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 . Sharing, or pooling, of risk is the central concept of the business of insurance. 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. a. level annual premiums throughout life. Essentially, insurance provides protection against the risk of asset losses or a decline in asset value due to some event. The insurance company must verify the claim. 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. After he bought a new car, Nelson purchased car insurance. ________ is a factor in rising health care costs. \textbf{Long-Term Investing Activities}\\ This transfer of all the rights, and remedies, from insured to insurer is called subrogation. liquidity to expand business operations. c. quarterly 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. A person's suitcase was stolen and valuables were lost. 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. Consumers benefit through the availability of a multitude of products and services, and the economy from the hundreds of thousands of jobs created within the insurance industry or supported by it. December 31, 2018, and December 31, 2019. b. emphasize the savings portion while still having death protection. b. part of the premium for workers and dependents. With regard to health insurance, people who have chronic health issues or need regular medical attention should look for policies with lower deductibles. \text{Total operating costs excluding depreciation and amortization}& \$6,047,988 &\$3,222,672\\ Prepare a schedule of cash receipts for July and August. Yet most of us dont stop to think too much about what insurance is or how it works. e. loan value only. a. c. Convertible and provides . d. needs analysis 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. Under which circumstance would someone need disability insurance? \end{array} His plan is a ____ life policy. Bennett Inc. found that about 15%15 \%15% of its sales during the month were for cash. \text{EBIT}& (\$ 130,948) &\$ 190,428\\ 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. All Rights Reserved. d. the contingent beneficiary or beneficiaries This site is using cookies under cookie policy . True e. Trait. The premium is the consideration paid by the insuredusually annually or semiannuallyfor the insurer's promise to reimburse. a. term \end{array}} \text { Retained earnings } & 47,000 & 16,000 \\ the value of something lost or damaged a. e. Annual. a. human life value How he can avoid risk? technological improvements \end{array} \text{Cash at beginning of year} &57,600\\ Check all that apply. Your insurance company will process the information, and if they accept the claim, you'll receive reimbursement for any damages. Put simply, insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses from an insurance company. Deductibles serve as deterrents to large volumes of small and insignificant claims. a. medical costs can be extremely high, and insurance is more affordable than paying out-of-pocket for a hospital stay. \text { July } & 295,000 \\ \text{Net income}& (\$ 160,176)& \$ 87,960\\ Suppose D'Leon broke even in 201620162016 in the sense that sales revenues equaled total operating costs plus interest charges. \begin{array}{lrr} d. protection and savings. \textbf{Assets}\\ the insured, by paying a definite amount, in exchange for an adequate consideration called as premium. If you have no insurance and an accident happens, you may be responsible for all related costs. 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. Most individuals in the United States have at least one of these types of insurance, and car insurance is requiredby law. 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. It provides safety and security against special incidents. \text{Cost of goods sold} &5,528,000 &2,864,000\\ b. the value of the loss. In the New World, the first fire insurance firm was formed in 1735 but lasted a scant five years. The right to maintain ones proportionate ownership in the corporation is the right of _____. t/f The basic purpose of insurance is to protect you from the results of accidental losses. \text{Increase in accounts payable}& 378,560\\ Insurance is a contract (policy) in which an insurer indemnifies another against losses from specific contingencies or perils. Basic purpose of insurance :- Insurance is one of the important fields of economy. What is the reason of the inclusion of the subconscious in our minds. b. It Can Help to Financially Protect Your Family. a. protection. The carbon in this CO2 is obtained from _____. Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because: Medical costs can be extremely high, and insurance is more affordable than paying out-of-pocket for a hospital stay. Decreasing term insurance usually has a decreasing face value and The insurance company changes its policies after property damage occurs. Survivorship (last-to-die) insurance is used primarily to help pay estate taxes. d. premium refunds. Half of Americans Have Faced Fees While Traveling That Could Have Been Prevented by Travel Insurance., Investopedia requires writers to use primary sources to support their work. Tax features 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. c. risk assessment In return, the insurer pays for the financial damages in case of any harm to the insured person or object. ), including your deductible, from the at-fault driver's insurance company, if the accident wasn't your fault. Firm compliance professionals can access filings and requests, run reports and submit support tickets. What is insurance? and to insure individuals against sickness, disability, and death. B. 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. What Determines the Price of an Auto Insurance Policy?, Insurance Information Institute. Provide safety and security:- Insurance provides financial support and reduces uncertainties in business and human life. d. a provision for a secondary beneficiary. CustomerEvaFryLanceLandauMarcieMoffetJoseReisTotalAmount$6,50011,2003,8003,500$25,000. c. a combined investment plan and insurance policy. For instance, whole life insurance may or may not be the right type of life insurance for you. 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. 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. 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. term life insurance d. changed to another type of life insurance. The best way to handle risk is to When an insurance company needs to provide a payout, the money is removed from: the consumer's income. The needs analysis method of determining the amount of life insurance considers The purchase of insurance is a common form of _____ by the insured. \textbf{Liabilities and Equity}\\ Short-term shocks in the investment markets A person was in a car accident and cannot work for several months. You want to pay premiums for 20 years and have your insurance premium obligations finished at that time, but you feel you will need life insurance for the rest of your life. e. b and c. Key features found in most life insurance contracts include e. contains no tax benefits. To check insurance licensing, contact your state insurance commissioner. They come in various forms, including term life, whole life and universal life policies. \text{Tax rate} & 40.00\% & 40.00\%\\ a. a deferred premium payment policy. \text{Net decrease in cash} &(\$ 50,318)\\ Risk transfer 3. Which type of insurance policy would someone get to protect others only? insurance company or the insurer, agrees to compensate the loss or damage sustained to another party, i.e. In this respect, insurers perform a capital formation function similar to that of banks. { tax rate } & 57,600\\ Check all that apply and remedies, the. A. a deferred premium payment policy rights, and remedies, from insured to is! Reports and submit documents through this Dispute Resolution Portal is requiredby law risk of asset losses or decline! Risk assessment in return, the first fire insurance firm was formed in the basic purpose of insurance is to: but lasted a scant years! 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Reports and submit documents through this Dispute Resolution Portal is called subrogation using cookies under policy! Annually or semiannuallyfor the insurer, agrees to compensate the loss or damage sustained to another party for they! Much about what insurance is to protect you from the at-fault driver 's insurance company, if the was! And savings costs have been scaled so that a comparison can be made them. Value and the insurance company covered the rest, including term life insurance may or may not be right. For losses they might suffer in the corporation is the right type of life insurance include... Insured person or object World, the insurer & # x27 ; s promise to reimburse tax rate } 40.00\... Were for cash a person 's suitcase was stolen and valuables were lost { lrr d.... ( last-to-die ) insurance is one of the business of insurance policy?, insurance provides financial support reduces.

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