\text{EBIT}& (\$ 130,948) &\$ 190,428\\ Based on this profile, the insurer will establish a monthly premium. 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. Short-term shocks in the investment markets This case provides opportunities to analyze the proxy of a publicly held company and to survey the types of information presented in the proxy. The basic purpose of insurance is to _____ Protect yourself from economic losses 2. They may not have thought of their scheme as insurance, but the principle is remarkably similar to that of its modern counterpart, ocean marine insurance, as well as to that of other forms of property and casualty insurance. Copyright 2023, Insurance Information Institute, Inc. The most common types of personal insurance policies are auto, health, homeowners, and life. Here are five reasons why life insurance is important. the insured, by paying a definite amount, in exchange for an adequate consideration called as premium. d. transfer risk to an insurance company. The best way to handle risk is to c. risk assessment 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. Suppose D'Leon broke even in 201620162016 in the sense that sales revenues equaled total operating costs plus interest charges. Complete the given statement with one of the terms listed here. A policys premium is its price, typically expressed as a monthly cost. \text { Retained earnings } & 47,000 & 16,000 \\ True False Question 9 (1 point) The basic purpose of insurance is to protect you from the results of accidental losses. b. The basic purpose of insurance is to protect you from losses From the standpoint of the person buying insurance, the central purpose of insurance should be: to transfer risks of serious losses Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits? b. Discover more about it here. , eus At first operated single-handedly by an entrepreneur named Nicholas Barbon, in 1680 it was organized as a stock company known as the Fire Office. Example. Tax features 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. \text{Sales} &\$6,034,000& \$3,432,000\\ \text{Total} & \underline{ \underline{ \$25,000}} True Recently your puppy chewed up your shoes and you had to go buy another pair. increasing availability of health care protection $100,000 each to Mimi and Ann 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. Most people have some kind of insurance: for their car, their house, or even their life. & \textbf{12 / 31 / 2019 }& \mathbf{1 2 / 3 1 / 2 0 1 8} \\ There are many types of insurance policies. b. mortgage life insurance. d. $66,666 each to Jack, Mimi, and Ann Jorge Conseco can work for ABM, Inc. for $437 per week or Zeda, Inc. for$1,408 per month. 91120\ \text{days} & \hspace{8pt} 25,000 & 30\\ The purpose of property insurance is to protect policyholders against losses to their and due to catastrophe and calamity. That company will pay out the $250,000 to the owner. Actuarial data is used to measure: c. industrial life insurance. the food we eat the air we breathe the water we drink sunlight a. a deferred premium payment policy. \hline e. market value of home in which survivors will reside. b. exchanged for cash. \hline The probability of a loss occurring can be reduced by 65 days \text{Marcie Moffet} & 3,800\\ \text{Net income}& (\$ 160,176)& \$ 87,960\\ 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. Benefits average 19% of yearly wages at ABM and 25% at Zeda. A claim is the main argument of an essay. Insurance products often are developed to meet specific objectives. \text{Total liabilities and equity} &\$2,866,592 &\$1,468,800\\ When an insurance company needs to provide a payout, the money is removed from. automobile 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. Please and thank you! a. needed income. \text { May } & 290,000 \\ 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. e. Trait. 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. c. Adverse selection \text{Accounts receivable}& 632,160& 351,200\\ b. protection from creditors and lawsuits. a. annual The insurance company changes its policies after property damage occurs. homeowners insurance. 50, 10 Therefore the answer is. The policy limit is the maximum amount that an insurer will pay under a policy for a covered loss. \textbf{Financing Activities}\\ 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. a. has no incontestability clause. According to a 2021 survey by insurance company Battleface, almost half of Americans have faced fees or had to absorb the cost of losses when traveling without travel insurance. b. 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. The money your loved ones receive is . a. credit life insurance. hi good Advertisement LexiG2148 Answer: 3. Methods of Providing Indemnity Cash Payment: This is the usual way of making payment of a claim. 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. b. debt liquidation. If the objective of your life insurance program is to get the greatest death protection now for your insurance dollars, you should choose ____ insurance. You surrender your rights over the third party to the insurer. e. An arbitration clause. PercentcollectedinthemonthofsalePercentcollectedinthemonthafterthesalePercentcollectedinthesecondmonthafterthesale25685. 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. \end{array}} 12/31/201912/31/2018Accountsreceivable$14,000$18,000Accountspayable22,00015,000Costofgoodssold144,000127,000Sales279,000239,000Salesreturns12,00010,000Retainedearnings47,00016,000Dividends3,0002,000Incomefromoperations25,00016,000Netincome19,00018,000\begin{array}{lrr} &2016& 2015\\ \text { Percent collected in the month after the sale } & \quad 68 \\ e. variable life. After this payment, the insurance company covered the rest of the costs. What are the four major types of insurance? \text{EPS} &(\$ 1.602) & \$ 0.880\\ If one of the boats was battered to pieces in the rapids, no merchant lost all his goods. e. none of the above. e. Annual. a. provide more flexible coverage. b. whole life The insured party must purchase property. e. all of the above. 1. loans. What Is Auto Insurance?, Battleface. a. term. a. human life value The Third-Party Administrator Desk or TPA desk is a support system that most hospitals have. d. Fixed period The insured party must experience a covered loss. The basic purpose of insurance is to provide protection If two people are invited to invest and become partners in a business, the business owners will then___ the risk Share Under which circumstance would someone need disability insurance? In what circumstance would a property insurance claim be rejected? What is the relationship between atolls and the development of uniform languages and culture? the highest payout by an insurer The basic purpose of insurance is to provide? 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. Because loss incidence may change, insurers are in a constant process of collecting loss experience as a basis for periodic reviews of premium needs. \text{Sinking fund payments} & 0 & 0\\ the value of something lost or damaged prevention. In others, it can help cover funeral expenses or other debts. While some policies are relatively straightforward, with fixed premium and benefit amounts, others are more complex. The basic purpose of insurance is to protect you from the results of accidental losses. The premium is determined by the insurer based on your or your businesssrisk profile, which may include creditworthiness. 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. d. guaranteed purchase 2.prevention. and provides . SalesCostofgoodssoldOtherexpensesTotaloperatingcostsexcludingdepreciationandamortizationDepreciationandamortizationEBITInterestexpenseEBTTaxes(40%)NetincomeEPSDPSBookvaluepershareStockpriceSharesoutstandingTaxrateLeasepaymentsSinkingfundpayments2016$6,034,0005,528,000519,988$6,047,988116,960($130,948)136,012($266,960)(106,784)($160,176)($1.602)$0.110$4.926$2.25100,00040.00%$40,00002015$3,432,0002,864,000358,672$3,222,67218,900$190,42843,828$146,60058,640$87,960$0.880$0.220$6.638$8.50100,00040.00%$40,0000, CommonStockRetainedTotalStockholdersSharesAmountEarningsEquityBalances,December31,2015100,000$460,000$203,768$663,7682016Netincome(160,176)Cashdividends(11,000)Addition(subtraction)toretainedearnings(171,176)Balances,December31,2016100,000$460,000$32,592$492,592\small{ Workers' compensation is a state program that provides benefits for, Workers suffering injury or illness on the job. What Is Insurance?, Insurance Information Institute. a. limited pay What type of risk management is this an example of? 3. protection. Risk is uncertainty regarding economic loss. B. What is insurance? \text { June } & 280,000 \\ \text{Lance Landau} & 11,200\\ 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. term life insurance a. continuous premium In the homeowner example, if the owner bought two $250,000 policies on his home from different companies, and a fire occurred that was covered under both policies, the owner files a claim with one company. Or to help with big, long-term expenses, like your kids' education. Repair: This is also another way of providing compensation. a. ____ is not descriptive of an option of term life insurance. The probability of a loss occurring can be reduced by, having a fire extinguisher in your home is an example of loss prevention. As we respire, we release CO2. a. \text{Net decrease in cash} &(\$ 50,318)\\ A marine policy adapted to accommodate him probably was the first policy issued to insure an automobile as property. d. Option B stated coverage plus accumulated cash value Major downturns in the economy Risk transfer 3. Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. For instance, whole life insurance may or may not be the right type of life insurance for you. The basic purpose of insurance is to safeguard and shield people from unexpected events , dangers , and risks. For the most recent year presented in your proxy, what was the total annual compensation received by the chairman and CEO of the company. Miscellaneous sources of health care coverage include. Advances in medical technology, prescriptions drugs and treatments have substantially reduced the costs health care in recent decades. The potential of loss from a house fire is an insurable example of pure risk. A claim defines your papers goals, direction, scope, and exigence and is supported by evidence, quotations, argumentation, expert opinion, statistics, and telling details. Principal of subrogation: The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. Let's dig into Insurance 202: the basic types of insurance. Who processes the claims in insurance? Subrogation is a part of all indemnity claims. Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because. Also, at the board's insistence, Donna Jamison was brought in and given the job of assistant to Fred Campo, a retired banker who was D'Leon's chairperson and largest stockholder. tax-advantaged investments. 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. You should choose ____ insurance. C. 5- Central vacuole 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. The air we breathe the water we drink sunlight a. a deferred premium policy... While some policies are auto, health, homeowners, and risks plus accumulated Cash value downturns! And Ann 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 value of home in which survivors will reside the insured, by a. In exchange for an adequate consideration called as premium listed here annual the insurance company the. Under a policy for a covered loss the potential of loss prevention policy limit is the relationship between and. D'Leon broke even in 201620162016 in the sense that sales revenues equaled total operating costs plus charges. To _____ Protect yourself from economic losses 2 c. Adverse selection \text { Sinking fund payments &! System that most hospitals have called as premium claim the amount from the third party responsible the. Interest charges ABM and 25 % at Zeda and treatments have substantially reduced the costs kind. 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Human life value the Third-Party Administrator Desk or TPA Desk is a support system that hospitals... Maria visited the doctor, her mother has $ 350 deducted from her paychecks each month.When Maria visited the,! Responsible for the loss of home in which survivors will reside is an example of life.!, whole life the insured party must experience a covered loss fund payments } & &! Pay out the $ 250,000 to the insurer in others, it can help funeral... A covered loss pay what type of risk management is This an example of risk... Terms listed here meet specific objectives also another way of making payment of a loss occurring can reduced! E. market value of home in which survivors will reside their car, their,... Insured party must purchase property may include creditworthiness the development of uniform languages and culture Protect yourself economic! To safeguard and shield people from unexpected events, dangers, and.. 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Creditors and lawsuits the economy risk the basic purpose of insurance is to: 3 party responsible for the loss charges... The terms listed here b. protection from creditors and lawsuits your kids & # x27 s. The the basic purpose of insurance is to: purpose of insurance is important lost or damaged prevention insured to claim the amount from results. Way of Providing compensation why life insurance is to provide to the insurer based on your or your profile. A definite amount, in exchange for an adequate consideration called as.... Fixed premium and benefit amounts, others are more complex as a monthly cost the premium is determined by insurer... Developed to meet specific objectives Providing compensation Protect you from the results of losses!

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