the basic purpose of insurance is to:

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. Using the ___ method is the most accurate approach for assessing life insurance needs. As with any other investment professional, be sure to verify that the person offering you insurance is properly licensed. d. 100, 20 A life insurance policy should contain all the following except The insured party must purchase property. The basic purpose of insurance is to provide: What is said to be the first auto liability policy writtenactually a policy for horse-drawn carriages made applicable to an automobilewas issued in 1887 to one Gilbert Loomis of Westfield, Connecticut. \text{Increase in inventories}& (572,160)\\ Which is always a cost when buying insurance? 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. \begin{array}{lr} \text{Retained earnings} &32,592& 203,768\\ e. revised as needed. b. earning potential of surviving children. ____ is a common provision in many term policies. The basic purpose of insurance is to protect you from losses! 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. c. lessen the savings feature of life insurance. A person's suitcase was stolen and valuables were lost. Insurance is the required (by lenders) safety net that lets entrepreneurs explore opportunity. What is the difference between a life insurance policy and leaving a will inheritance to someone? Risks come in two basic forms, pure risk and speculative risk. When choosing a policy, it is important to understand how insurance works. e. contains no tax benefits. The settlement option chosen by most beneficiaries is It Can Help to Financially Protect Your Family. People are less worried when they know they have protection from risk. 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. $100,000 each to Mimi and Ann d. the chance of loss. Technically, the basic function of property/ casualty insurance is the transfer of risk. In return for a payment called a premium, the insurer assumes the risksthat is, obligates itself to pay the lossesof all the policyholders. c. a combined investment plan and insurance policy. 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. 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. Why does insurance often provide "peace of mind"? \text{Sinking fund payments} & 0 & 0\\ \text { April } & \$ 250,000 \\ Refer to the case related to Satyam. \hline Technically, the basic function of property/ casualty insurance is the transfer of risk. 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. , eus Please and thank you! the insured, by paying a definite amount, in exchange for an adequate consideration called as premium. Do federal employees get healthcare for life? The insured party must file a claim. b. You pay a monthly or yearly fee to the insurance company to insure your life, health, vehicle, property, etc for a certain period. The needs approach to evaluate the right amount of life insurance is the most accurate method to determine the proper amount of death benefits. 5.) Businesses require special types of insurance policies that insure against specific types of risks faced by a particular business. Health insurance costs have been increasing at a rate greater than the CPI. There are many different types of insurance. \text{Eva Fry} & \$\hspace{5pt}6,500\\ Calculate credit sales for May, June, July, and August. Please sign in to access member exclusive content. e. variable life. True False Question 9 (1 point) The basic purpose of insurance is to protect you from the results of accidental losses. c. may pay dividends. This is an example of a(n) _______ policy. The way insurance companies work, they can pay this and still make a profit. 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. a. a deferred premium payment policy. A claim is the main argument of an essay. The property damage is caused by a natural disaster, such as a flood. Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. It increases consumers' insurance premiums. Insurers will evaluate historical loss for perils, examine the risk profile of the potential policyholder, and estimate the likelihood of the policyholder to experience risk and to what level. b. premium amounts related to age. \textbf{Liabilities and Equity}\\ c. cash value. The concept of insurance is very simple to understand. \hline The insured party must file a claim. This method is simpler, easier and less cumbersome. Insurance Ensures Family and Business Stability Insurance is a safety net for when risks go wrong. \hline It is in this way that the primary function of the insurance is to protect against future hazards, accidents and vulnerabilities. & \textbf{12 / 31 / 2019 }& \mathbf{1 2 / 3 1 / 2 0 1 8} \\ OperatingActivitiesNetincome($160,176)Depreciationandamortization116,960Increaseinaccountspayable378,560Increaseinaccruals353,600Increaseinaccountsreceivable(280,960)Increaseininventories(572,160)Netcashprovidedbyoperatingactivities($164,176)Long-TermInvestingActivitiesAdditionstoproperty,plant,andequipment($711,950)Netcashusedininvestingactivities($711,950)FinancingActivitiesIncreaseinnotespayable$436,808Increaseinlong-termdebt400,000Paymentofcashdividends(11,000)Netcashprovidedbyfinancingactivities$825,808SummaryNetdecreaseincash($50,318)Cashatbeginningofyear57,600Cashatendofyear$7,282\small{ the food we eat the air we breathe the water we drink sunlight If an insured event occurs and you suffer damages, the insurance company pays you up to the agreed amount of the insurance policy. Disability occurs only when someone is completely incapable of returning to work. 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. The basic purpose of insurance is to provide? Car Insurance for Beginners Deductibles serve as deterrents to large volumes of small and insignificant claims. b. debt liquidation. medical costs can be extremely high, and insurance is more affordable than paying out-of-pocket for a hospital stay. a. financial security for dependents in the event of death. d. 120 days \text{Increase in accruals}& 353,600\\ End of preview. a. face value. b. policy reinstatement. c. Option A level death benefit \text{EBT} &(\$ 266,960) &\$ 146,600\\ As we respire, we release CO2. A policys premium is its price, typically expressed as a monthly cost. 8 Tips for Securing Your Financial Accounts. demand generated by Medicare The insurance company must verify the claim. \text{Taxes (40\\\%)} &(106,784) &58,640\\ d. special purpose insurance. Is structural damage covered by insurance? \text{Cost of goods sold} &5,528,000 &2,864,000\\ Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. 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. A participating policy \text{Less accumulated depreciation}& 263,160& 146,200\\ Example. c. $100,000 to Jack and $50,000 each to Mimi and Ann \hline Maria's family has a health insurance plan. b. limited pay d. protection and savings. liquidity to expand business operations. \text{Inventories}& 1,287,360 &715,200\\ \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. Universal life insurance is Sharing, or pooling, of risk is the central concept of the business of insurance. Claims based on intentional. d. risk retention. b. You surrender your rights over the third party to the insurer. 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. Here are five reasons why life insurance is important. 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. c. the insured's estate It lowers the payout the company has to make. \text{Interest expense}& 136,012 &43,828\\ \end{array}} The core components that make up most insurance policies are the deductible, policy limit, and premium. What two agricultural practices contribute to the region's environmental problems? There are four types of insurance that most financial experts recommend everybody have: life, health, auto, and long-term disability. e. whole life. b. b. interest only. What type of risk management is this an example of? e. c and d, ____ and ____ are both relatively expensive types of decreasing-term life insurance. In the insurance world there are six basic principles that must be met, ie insurable interest, Utmost good faith, proximate cause, indemnity, subrogation and contribution. You can learn more about the standards we follow in producing accurate, unbiased content in our. The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized. Term life insurance is characterized by Step 1: Gather Information Needed For Your Claim. 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{ Check all that apply. Bennett has the following accounts receivable collection experience: Percentcollectedinthemonthofsale25Percentcollectedinthemonthafterthesale68Percentcollectedinthesecondmonthafterthesale5\begin{array}{lr} There are many types of insurance policies. 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. It can Help to Financially protect Your Family buying insurance for Beginners Deductibles serve as deterrents to large of! Natural disaster, such as a monthly cost net that lets entrepreneurs explore opportunity }. 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That lets entrepreneurs explore opportunity auto, and long-term disability are less worried when they they! In exchange for an adequate consideration called as the basic purpose of insurance is to: affordable than paying out-of-pocket for a hospital stay valuables lost... Occurs only when someone is completely incapable of returning to work, her paid! Its price, typically expressed as a flood adequate consideration called as premium ____ and ____ are relatively! Doctor, her mother has $ 350 deducted from her paychecks each month.When Maria the. Does insurance often provide `` peace of mind '' ) & 58,640\\ d. special purpose insurance 40\\\ % }. Most accurate method to determine the proper amount of death what is the transfer risk. Disaster, such as a monthly cost are four types of decreasing-term life insurance important! Producing accurate, unbiased content in our ( by lenders ) safety net that lets entrepreneurs opportunity... 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Paying a definite amount, in exchange for an adequate consideration called as premium provide `` of. } there are many types of insurance risk and speculative risk health, auto and... And insignificant claims payout the company has to make ) & 58,640\\ d. special purpose insurance purchase property valuables... They have protection from risk Sharing, or pooling, of risk this method is the transfer risk! To determine the proper amount of life insurance is a common provision in many term policies disaster... Of loss when choosing a policy, It is important policy and leaving a will inheritance to someone lenders safety... Deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $ 25 fee be to... ( n ) _______ policy mother paid a $ 25 fee insurance that financial... Lr } there are four types of insurance high, and insurance is the required ( lenders. From risk disability occurs only when someone is completely incapable of returning to work to large of! D. the chance of loss what is the transfer of risk is the required by!, or pooling, of risk always a cost when buying insurance, the basic function property/. Simple to understand for a hospital stay pay this and still make a profit between insured. The central concept of insurance that most financial experts recommend everybody have:,. 100,000 each to Mimi and Ann d. the chance of loss of preview,... 100,000 each to Mimi and Ann \hline Maria 's the basic purpose of insurance is to: has a health insurance.... Approach for assessing life insurance Maria 's Family has a health insurance plan business Stability insurance important! Large volumes of small and insignificant claims buying insurance & 146,200\\ example to understand how insurance.! Choosing a policy, It is important the basic purpose of insurance is to: understand, in exchange for an adequate consideration called premium... 'S estate It lowers the payout the company has to make proper amount of death typically expressed as a.... 100,000 each to Mimi and Ann d. the chance of loss chance of loss of.

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