Risk Management Review Personal Finance 3 n

Risk Management Review Personal Finance

3 n. A method for spreading individual risk among a large group of people to make losses more affordable for all. n Insurance

6 n The insurance policyholder should be put back in the same financial condition he was in before the loss occurred. n Indemnification

7 n Government sponsored health insurance for people currently age 65 or older. n Medicare

8 n Eliminate the chance for loss by never doing the activity. n Risk avoidance

9 n Pay premiums throughout your entire life and beneficiaries receive a stated benefit at death. (permanent life insurance) n Straight life

10 n. Chances of loss involving your income and standard of living. n. Personal risks

11 n. Wearing a seatbelt is an example of this type of strategy for dealing with risks. n. Risk reduction

12 n. Allows the insured to stop paying premiums if they become disabled, but keep the policy. (life insurance) n. Waiver of premium

13 n. Another name for term life. n. Temporary

14 n. Establish a fund assume financial responsibility for all losses. n. Risk assumption

16 n. Group plan offering prepaid medical care to its members. n. Health maintenance organization (HMO)

17 n. Once the policy has been in place a stated length of time, the insurer can no longer question items on the application to deny coverage. (life insurance provision) n. Incontestable clause

18 n. List a way to save on insurance premiums. n Increase deductibles n Purchase group insurance n Consider payment options – Paying monthly is usually more expensive n Look for discount opportunities n Comparison shop

19 n. Chances of loss or harm to personal or real property. n. Property risks

20 n. Makes regular payments to replace lost income when illness or injury prevents the insured from working. n. Disability insurance

21 n. A company collects premiums from employees to pay medical benefits. n Based on mathematical probability. n Assumes only a very few employees will need extensive medical services. n Self-Insurance Plans

22 n. Renting a house instead of buying one is an example of this type of strategy for dealing with risk. n. Risk avoidance

23 n. Government-sponsored health insurance for people with low incomes and limited resources. n. Medicaid

24 n. Chances of loss that may occur when your errors or inappropriate actions result in bodily injury to someone else or damage to someone else’s property. n. Liability risks

25 n. Gambling is this type of risk. n. Speculative risk

26 n. Plan for sharing the risk of high medical costs resulting from injury or illness. n. Health insurance

27 n. Why are group policies less expensive? n. Spread the risk among many people.

28 n. An organized strategy for controlling financial loss from pure risks. n. Risk management

29 n. A chance of loss with no chance for gain. This type of risk is insurable. n. Pure risk

30 n. Beneficiary is paid twice the face amount. (life insurance) n. Double indemnity

31 n. What n Allows is COBRA insurance? people who leave employment to continue their health insurance under the company plan for a limited period of time (usually 18 months).

32 n. Protects renters from property and liability risks. n. Renter’s insurance

33 n. Provision that specifies how the insurers will share the cost when more than one policy covers a claim. n. Coordination of Benefits

34 n. Person who determines the value of the property destroyed. n. Claims adjustors

35 n. Take measures to lessen the frequency or severity of losses that may occur. n. Risk reduction

36 n. A group of healthcare providers who band together to provide health services for set fees. n. Preferred provider organization (PPO)

37 n. Small insurance policy that modifies the coverage of the main policy. n. Rider

38 n Must prove you are disabled. n Must have a physical or mental condition that prevents you from working. n Condition must be expected to last 12 months or lead to death. n Benefits determined by your pay and the number or years you have been covered under Social Security. n Social Security disability

39 n. People who look for evidence of destroyed or damaged property. n. Insurance investigators

41 n. Covers your expenses if your injury or illness resulted from your job. n. Worker’s compensation insurance

42 n. Investing in the stock market is an example of this type of risk. n. Speculative risk

43 n. Predict the probability of death at different ages. Premiums are based on these tables. n. Mortality tables

44 n. A(n) ______ is a written amendment to an insurance policy. n. Endorsement

45 n. Coverage for the insured’s moveable property wherever it may be located. n. Personal property floater

48 n. This coverage covers property when it is in your home or when it is with you away from home. n. Theft and vandalism coverage

49 n. A risk that may result in a loss or gain. n. Speculative risk

50 n. This type of coverage pays for temporary housing while the house is being repaired or rebuilt. n Physical damage coverage

51 n. Requires policyholders to insure their building for a certain percentage of its replacement value in order to receive full reimbursement for a loss. n. Co-insurance clause

52 n. Driving a car is an example of this type of risk. n. Pure risk

53 n. Covers claims for bodily injury to another person or damage to another person’s property. n. Liability coverage

54 n. Protection provided by the terms of an insurance policy. n. Coverage

55 n. The portion of a paid premium that the insurer has not yet earned because the policy term has not ended. n. Unearned premium

56 n. A table of premium rates based on ages and life expectancies. n. Actuarial table

57 n. A specialist in insurance calculations and statistics. n. Actuary

58 n. A policyholder’s request for reimbursement for a loss under the terms of an insurance policy. n. Claim

59 n. The specified amount of a loss that a policyholder pays before the insurer is obligated to pay anything. n. Deductible

60 n. The amount of money payable to a policyholder upon discontinuation of a life insurance policy. n. Cash value

61 n. Sums of money to be paid for specific types of losses under the terms of an insurance policy. n. Benefits

62 n. The additional time after the premium due date that the insurer allows the policyholder to make the payment without penalty. n. Grace period

63 n. Person named on an insurance policy to receive the benefits from the policy. n. Beneficiary

64 n. A professional insurance salesperson who acts for the insurer in negotiating, servicing, or writing an insurance policy. n. Insurance agent

65 n. The amount stated in a life insurance policy to be paid upon death. n. Face amount

66 n. An unexpected reduction in value of the insured’s property caused by a covered peril. n. Loss

67 n. A condition that creates or increases the likelihood of some loss. n. Hazard

68 n. The person or company protected against loss. n. Insured

69 n. Specified losses that the insurance policy does not cover. n. Exclusions

70 n. The written verification of the amount of a loss that must be provided by the insured to the insurer before a claim can be settled. n. Proof of loss

71 n. The contract form that has been adopted by many insurers, approved by state insurance divisions, or prescribed by law. n. Standard policy

72 n. An event whose occurrence can cause a loss. n. Peril

Final Question n. Explain the concept of indemnification. n. The insured should be put back in the same financial condition that they were in prior to the loss.