a. term. c. changed to health or disability protection A participating policy Which type of insurance policy would someone get to protect others only? Insurance is a financial service that allows a: Consumer to share liability with a company. d. special purpose insurance. a. All Rights Reserved. d. Renewable By the dictionary definition, insurance is the arrangement you make with a company or a state. The company prepared the following aging schedule for its accounts receivable on December 313131, 201020102010: AgingClass(NumberReceivablesBalanceEstimatedPercentofofDaysPastDue)onDecember31UncollectibleAccounts030days$480,0001%3160days100,00036190days40,0002091120days25,00030Morethan120days5,00040Totalreceivables$650,000\begin{array}{lcc} Many airline passengers purchase a special life insurance policy frequently sold at the airport. When an insurance company needs to provide a payout, the money is removed from: the consumer's income. The core components that make up most insurance policies are the deductible, policy limit, and premium. Provide safety and security:- Insurance provides financial support and reduces uncertainties in business and human life. The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized. d. requires a savings function. \textbf{Customer} & \textbf{Amount}\\ File a complaint about fraud or unfair practices. : 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 \text{Eva Fry} & \$\hspace{5pt}6,500\\ c. Column definitions and key terms 030\ \text{days} & \$480,000 & \hspace{12pt}1\%\\ \textbf{of Days Past Due)} & \textbf{on December}\ \bm{31} & \textbf{Uncollectible Accounts}\\ c. Convertible Let's dig into Insurance 202: the basic types of insurance. Rodney and Toni are a young couple with two small children. \text{Other expenses} &519,988& 358,672\\ 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. This is an example of a(n) _______ policy. a. Myers-Briggs indicator. Getting auto insurance can offer reassurance in case youre involved in an accident or the vehicle is stolen, vandalized, or damaged by a natural disaster. \text{Accounts receivable}& 632,160& 351,200\\ e. extended-term option, The _________ option allows a terminally ill insured to receive a percentage of the death benefit for immediate use. In return for a payment called a premium, the insurer assumes the risksthat is, obligates itself to pay the lossesof all the policyholders. d. transfer risk to an insurance company. 3. protection. Her husband, Jack, was the primary beneficiary and their children, Mimi (age 24) and Ann (age 30), were the contingent beneficiaries. What Is Insurance?, Insurance Information Institute. Each type of life insurance has its own pros and cons. \text{Tax rate} & 40.00\% & 40.00\%\\ Personal injury protection (PIP) is a feature of auto insurance that covers medical expenses related to a car accident. Who processes the claims in insurance? c. Introversion. Subrogation allows your insurer to recoup costs (medical payments, repairs, etc. a. settlement options. Universal life insurance is This method is simpler, easier and less cumbersome. 5. C. 5- Central vacuole 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. \text{Accruals}& 489,600 &136,000\\ You must help her answer the following questions for Campo. Life insurance is meant to help protect your family's financial future. This would be an example of risk assumption. \text{Sinking fund payments} & 0 & 0\\ The probability of a loss occurring can be reduced by d. the chance of loss. A person has contracted the flu and needs a prescription. 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. Lets look at the most important. a. The purchase of insurance is a common form of _____ by the insured. So finding the price that is right for you requires some legwork. Risk transfer 3. 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? OK International wrote off the following accounts receivable as uncollectible for the year ending December 313131, 201020102010: CustomerAmountEvaFry$6,500LanceLandau11,200MarcieMoffet3,800JoseReis3,500Total$25,000\begin{array}{lr} When you buy or lease a car, its important to protect that investment. A policyholder 's health insurance claim can get settled by an insurer in two ways: third-party administrators ( TPA ) and through the insurer's in-house claims processing department. liquidity to expand business operations. 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. There are two main types of life insurance: term and permanent. 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. Its aim is to reduce financial uncertainty and make accidental loss manageable. Health insurance costs have been increasing at a rate greater than the CPI. After this payment, the insurance company covered the rest of the costs. b. group insurance. Contribution the principle holding that two or more insurers each liable for a covered loss should participate in the payment of that loss. Our society could hardly function without insurance. As we respire, we release CO2. \textbf{Financing Activities}\\ Life insurance can support the life of a family, should a member be lost. 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. A. The basic assumptions that the company uses to compute its insurance illustrations include all except He has purchased a face value of $100,000 and can accumulate cash value. \text{Net income}& (\$ 160,176)& \$ 87,960\\ \text{Sales} &\$6,034,000& \$3,432,000\\ b. living benefits \hline b. savings only. \text{Total current assets}& \$1,926,802& \$1,124,000\\ The claims settlement process is one of the most important aspects of an insurance policy, especially if it is a health cover. 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 . of supplemental retirement income, and the payoff of mortgages. e. use some combination of these. d. fixed time. 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. \end{array}} b. semiannual Assuming that all of the operating expenses are fixed (or, wont change as sales increase or \end{array}} PERSONAL PROPERTY due to catastrophe and calamity. Auto insurance is purchased by vehicle owners to mitigate costs associated with getting into an auto accident. a. annual Which of the following companies does not rate the financial strength of life insurance companies? 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? all of the above. Actuarial data is used to measure: \text{Net decrease in cash} &(\$ 50,318)\\ In what circumstance would a property insurance claim be rejected? Would the asset expansion have caused the company to experience a cash shortage that required it to raise external capital? As an additional benefit of to society, insurers themselves, the trustees of policyholder and stockholder funds, become major investors and suppliers of capital to the economy. a. \text{Balances, December 31}, 2016& 100,000& \$460,000 &\$ 32,592& \$ 492,592\\ e. biennial, When a primary beneficiary dies before the insured, proceeds are payable to c. inappropriateness for most person's life insurance needs. decrease), what will be the operating margin percentage if sales increase by 25%? It increases consumers' insurance premiums. 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. c. limited payment 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. a. high-yield investments. \text{Retained earnings} &32,592& 203,768\\ the insured, by paying a definite amount, in exchange for an adequate consideration called as premium. Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. 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? Sometimes, claim requests are directly submitted by medical billers in the healthcare facility and sometimes, it is done through a clearing house. 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. the food we eat the air we breathe the water we drink sunlight The basic purpose of insurance is to _____ Protect yourself from economic losses 2. protection from creditors and lawsuits. Example. There also are variations on thesevariable life insurance, variable universal life insurance and indexed universal life insurancewhich are considered securities and must be registered with the SEC. Consumer Financial Protection Bureau. b. exchanged for cash. d. needs analysis 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? 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