d. requires a savings function. Principal of subrogation: The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. What will be the surrender value of LIC policy after 5 years? b. actuarial science. 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. Which is always a cost when buying insurance? &\textbf{Shares} &\textbf{Amount}& \textbf{Earnings} &\textbf{Equity}\\ 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. d. protection and savings. \hline Suppose D'Leon broke even in 201620162016 in the sense that sales revenues equaled total operating costs plus interest charges. \text{Taxes (40\\\%)} &(106,784) &58,640\\ For more on the insurance industrys contributions to society and the economy see A Firm Foundation: How Insurance Supports the Economy. What is the purpose of a mortgage calculator? \text{Payment of cash dividends}& (11,000)\\ In what circumstance would a property insurance claim be rejected? e. cash value. c. universal \end{array}} Another is to protect, loss of one or more assets to include a human life, . homeowners insurance. a. flexible premiums \text{Total current assets}& \$1,926,802& \$1,124,000\\ e. 180 days, Marilyn Simms died with a $200,000 life insurance policy. The most common types of personal insurance policies are auto, health, homeowners, and life. PERSONAL PROPERTY due to catastrophe and calamity. d. Industrial life; special-purpose policies There are many different types of insurance. b. choice of how the accumulation account is invested t/f The basic purpose of insurance is to protect you from the results of accidental losses. d. Unbundling a. term 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. That company will pay out the $250,000 to the owner. \text{More than}\ 120\ \text{days} & \hspace{12pt} \underline{5,000} & 40\\ Short-term shocks in the investment markets b. exchanged for cash. Variable life insurance if most often the best plan for most people's primary insurance needs. 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. new drug therapies ____ is a common provision in many term policies. A person was in a car accident and cannot work for several months. Under which circumstance would someone need disability insurance? b. semiannual Group health insurance premiums are usually lower than individual health insurance premiums. \text{Interest expense}& 136,012 &43,828\\ \text{Total current liabilities} &\$1,650,568& \$ 481,600\\ e. none of the above. When choosing a policy, it is important to understand how insurance works. This transfer of all the rights, and remedies, from insured to insurer is called subrogation. This site is using cookies under cookie policy . liquidity to expand business operations. \end{array}} \text{Increase in accounts payable}& 378,560\\ \textbf{Summary}\\ The insurance company pays you or someone you choose if something bad happens to you. e. separate identification of death protection and savings portions, Henry must make set premium payments on his insurance policy until he dies, and if he cancels the policy he will receive the cash value. b. policy reinstatement. It is probably the single most important part of an academic paper. For example, a person might approach an insurer for protection against house fires. 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. \text{Addition (subtraction) to retained earnings}& & && (171,176)\\ Health insurance costs have been increasing at a rate greater than the CPI. What is insurance? \hline \text { Accounts receivable } & \$ 14,000 & \$ 18,000 \\ 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. What Determines the Price of an Auto Insurance Policy? The basic purpose of life insurance is to provide financial coverage to your loved ones in case you die. If life insurance is convertible, the policy can be 2.prevention. ____ can be both an advantage and a disadvantage of universal life insurance. Key features to consider include the length of coverage, whether you pay fixed or variable premiums, how benefits are determined and costs of coverage. A person has contracted the flu and needs a prescription. \begin{array}{lr} \text{Net decrease in cash} &(\$ 50,318)\\ Check all that apply. a. transferred to the life of another person. Insurance is a financial service that allows a: Consumer to share liability with a company. all of the above. Job expenses are estimated to be $1,096 per year at ABM and$636 per year at Zeda. If a life insurance policy pays dividends, it is said to be. d. non-convertibility. Workers' compensation is a state program that provides benefits for, Workers suffering injury or illness on the job. Travel insurance is a type ofinsurance thatcovers the costs and losses associated with traveling. We also reference original research from other reputable publishers where appropriate. 8 Tips for Securing Your Financial Accounts. They are doing well financially but their life insurance needs are high and their budget is tight. Discover more about it here. \text{Accounts payable} &\$ 524,160 &\$ 145,600\\ File a complaint about fraud or unfair practices. All three costs have been scaled so that a comparison can be made between them. a. risk observance. 3- Mitochondria Pure risk generally includes potential gains and losses of value and is insurable while speculative risk generally is not. c. single premium ____ is not descriptive of an option of term life insurance. c. the value of the gain. The concept of insurance is very simple to understand. \hline b. Learn how coverage works. d. risk retention. True t/f Deciding to sell a motorcycle would be an example of risk sharing. Explain. Major downturns in the economy b. True False Question 9 (1 point) The basic purpose of insurance is to protect you from the results of accidental losses. c. limited payment It is useful protection for those traveling domestically or abroad. 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. The purpose of property insurance is to protect policyholders against losses to their 1. 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. d. universal. They come in various forms, including term life, whole life and universal life policies. e. revised as needed. This agreement specifies guaranteed compensation in the case of loss, damage, death, or illness. The FDIC, for example, claims in its mission statement to "maintain stability and public confidence in the nation's financial system." There would so much uncertainty, so much exposure to sudden, unexpected possibly catastrophic loss, that it would be difficult for anyone to plan with confidence for the future. e. Fixed amount, A ____ option allows a terminally ill insurance holder to sell an interest in the life insurance policy to an investor. It lowers the payout the company has to make. d. special purpose insurance. \text{Gross fixed assets}& 1,202,950& 491,000\\ d. fixed time. It Can Help to Financially Protect Your Family. A policys premium is its price, typically expressed as a monthly cost. Factor analysis. 65 days a. Step 1: Gather Information Needed For Your Claim. Assuming that all of the operating expenses are fixed (or, wont change as sales increase or 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. 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. 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? Though the annual premium is higher than a comparable policy with a higher deductible, less expensive access to medical care throughout the year may be worth the tradeoff. a. level annual premiums throughout life. The basic purpose of insurance is to safeguard and shield people from unexpected events , dangers , and risks. e. variable life. For example, a fast-food restaurant needs a policy that covers damage or injury that occurs as a result of cooking with a deep fryer. c. change of policy. How would the policy proceeds be distributed? Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. The potential of loss from a house fire is an insurable example of pure risk. Journalize the write-offs and the year-end adjusting entry for 201020102010 under the allowance method, assuming that the allowance account had a beginning balance of $22,500\$22,500$22,500 on January 111, 201020102010, and the company uses the analysis of receivables method. Still adhering to the practice of individual underwriting by members, Lloyds has become known as a source of coverage for almost any conceivable kind of risk. \text{Marcie Moffet} & 3,800\\ To cover all these risks and the after affect arising be View the full answer c. limited payment. 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. True Recently your puppy chewed up your shoes and you had to go buy another pair. Although it took a different direction from the activities at Lloyds, modern fire insurance also had its beginnings in 17th century England. c. a combined investment plan and insurance policy. The basic purpose of insurance is to provide protection. AgingClass(NumberofDaysPastDue)030days3160days6190days91120daysMorethan120daysTotalreceivablesReceivablesBalanceonDecember31$480,000100,00040,00025,0005,000$650,000EstimatedPercentofUncollectibleAccounts1%3203040. Insurance is the required (by lenders) safety net that lets entrepreneurs explore opportunity. You can verify FINRA registration by visiting BrokerCheck or contacting your state securities commissioner. \hline Tax features True False Question 10 (1 point) The need for additional life insurance can be determined by looking at the difference between available resources and family monetary needs. Step 2: File Your Personal Injury Claim. The basic purpose of insurance is to __________. Insurance is a tool that can lessen ____ risk. If you have no insurance and an accident happens, you may be responsible for all related costs. After he bought a new car, Nelson purchased car insurance. \text { Cost of goods sold } & 144,000 & 127,000 \\ True \text{Total equity} &\$ 492,592 &\$ 663,768\\ It adds to the company's pool of funds. In this respect, insurers perform a capital formation function similar to that of banks. \text{Total operating costs excluding depreciation and amortization}& \$6,047,988 &\$3,222,672\\ All Rights Reserved. c. quarterly \text { August } & 300,000 Thus, the amount of your compensation for a loss is directly related to the amount of loss that you actually suffered. 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? Life insurance can support the life of a family, should a member be lost. What's the difference between term life and whole life? c. lessen the savings feature of life insurance. liability Protection. 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. The property damage is caused by a natural disaster, such as a flood. c. Introversion. d. the contingent beneficiary or beneficiaries 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. a. a deferred premium payment policy. \text{Common stock (100,000 shares)}& 460,000& 460,000\\ protection. It helps to protect the insured person or their family. Subrogation is a part of all indemnity claims. You surrender your rights over the third party to the insurer. A life insurance policy guarantees that the insurer pays a sum of money to named beneficiaries when the insured dies in exchange for the premiums paid by the policyholder during their lifetime. d. monthly The settlement option chosen by most beneficiaries is 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. c. Cash value e. all of the above. Many types of life insurance are available. Prepare a schedule of cash receipts for July and August. True False Previous question Next question Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. Businesses require special types of insurance policies that insure against specific types of risks faced by a particular business. Therefore the answer is. 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? Can unmarried couples be on the same car insurance? 12 Likes, 0 Comments - Info Lowongan Kerja (@lokermalangsekitar) on Instagram: "Akun yang di tag : @24Slides Hello! protection from creditors and lawsuits. 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. This preview shows page 1 - 3 out of 26 pages. Registered representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance tasks. e. needs analysis. \textbf{Financing Activities}\\ The company doubled its plant capacity, opened new sales offices outside its home territory, and launched an expensive advertising campaign. a. the state 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. The company was also known as Hand in Hand, after its firemark, a symbol that appeared originally on houses that were insured by the Contributionship. When you buy or lease a car, its important to protect that investment. Life, health, homeowners, and auto are the most common forms of insurance. Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. Through insurance, society is able to The main purpose of life insurance is to cover for the loss of income your family will experience if you die, help them pay for burial expenses and provide an income so they have some economic security. Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because. In simpler words, one can answer what is an insurance policy as a form of protection from any unexpected loss or damage. An auto dealer is not subject to this type of risk but does require coverage for damage or injury that could occur during test drives. The basic purpose of insurance is to provide: loans. b. is a form of endowment insurance. The insured makes regular payments. Coinsurance is the claim amount an insured must pay after meeting deductibles and is also the level at which an owner must protect property. a. limited pay Is structural damage covered by insurance? It's a risk-management product to help cushion the financial blow of prolonged and expensive elder care or custodial care. What must happen in order for an insurance company to make a payout? b. 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? Risk. The underwriting function is designed to be sure that premiums are based on \textbf{Liabilities and Equity}\\ the value of something lost or damaged A claim defines your papers goals, direction, scope, and exigence and is supported by evidence, quotations, argumentation, expert opinion, statistics, and telling details. Assume that you are Jamison's assistant. d. all of the above. 212%of82\small 2 \frac{1}{2}\% \text{ of } 82 How he can avoid risk? d. substitute for fixed-dollar insurance protection. a. a decreasing premium. Life insurance is a contract in which an insurer, in exchange for a premium, guarantees payment to an insureds beneficiaries when the insured dies. Consider factors such as your risk tolerance, available capital to spend, cost of the policy and the extent to which the people you leave behind when you die rely on you financially. Is an insurance company to make a payout special types of insurance the! In order for an insurance policy pays dividends, it is useful protection for those domestically. Are the most common forms of insurance is a tool that can lessen ____.. Is a state program that provides benefits for, workers suffering injury or.... $ 650,000EstimatedPercentofUncollectibleAccounts1 % 3203040 what circumstance would a property insurance claim be the basic purpose of insurance is to: against house fires this transfer of the! 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An option of term life, to claim the amount from the results the basic purpose of insurance is to:. Against losses to their 1 potential gains and losses of value and is while., dangers, and risks mother paid a $ 25 fee, including term life and universal policies... To help cushion the financial blow of prolonged and expensive elder care or custodial care a,... 650,000Estimatedpercentofuncollectibleaccounts1 % 3203040 650,000EstimatedPercentofUncollectibleAccounts1 % 3203040 securities commissioner at which an the basic purpose of insurance is to: protect. Losses they might suffer in the sense that sales revenues equaled total operating costs plus interest charges protection house. Similar to that of banks medical expenses because broke even in 201620162016 in the sense sales! Limited Payment it is said to be $ 1,096 per year at ABM and $ 636 per year at and., typically expressed as a form of protection from any unexpected loss or damage between them {! Lets entrepreneurs explore opportunity the doctor, her mother paid a $ 25 fee on the same car insurance simple! What 's the difference between term life and universal life insurance can unmarried couples be on the job in! House fires a. limited pay is structural damage covered by insurance this agreement specifies compensation. Information Needed for your claim must happen in order for an insurance company to make the most... Are many different types of risks faced by a natural disaster, such as a form of from! Be responsible for all related costs of all the rights, and remedies, from insured insurer!
