A grace period permits the policyholder to retain full protection for usually _____ after missing a payment. Benefits average 19% of yearly wages at ABM and 25% at Zeda. What type of life insurance will give them the most protection for their money? d. $66,666 each to Jack, Mimi, and Ann Assume that you are Jamison's assistant. Insurance is a tool that can lessen ________ risk. In what circumstance would a property insurance claim be rejected? The insurance company must verify the claim. False t/f Spreading risk among a large number of people is a major principle of insurance. \text{Accounts receivable}& 632,160& 351,200\\ Term and whole life insurance policies are regulated by state insurance commissioners. 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. A life insurance policy should contain all the following except a. risk observance. The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized. As a result, Watkins was informed that changes would have to be made-and quickly; otherwise, he would be fired. This case provides opportunities to analyze the proxy of a publicly held company and to survey the types of information presented in the proxy. It increases consumers' insurance premiums. Maximums may be set per period (e.g., annual or policy term), per loss or injury, or over the life of the policy, also known as the lifetime maximum. The first fire insurance company was founded in London the following year. d. industrial 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} \textbf{Summary}\\ Interest only term life insurance a. avoid risk Life insurance policies will vary greatly among companies, which offer many different types of coverage and prices. The basic purpose of insurance is to protect you from losses protect your health protect your income shield you from bad decisions Question 2 (1 point) Spreading risk among a large number of people is a major principle of insurance. A successful subrogation means a refund for you and your insurer. For example, a person might approach an insurer for protection against house fires. The basic purpose of insurance is to safeguard and shield people from unexpected events , dangers , and risks. We're looking for Junior Quality . \begin{array}{lcccc} 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. c. fixed amount. It Can Help to Financially Protect Your Family. protection for designated beneficiaries upon the death of a covered individual, can provide protection to homeowners, renters, and the owners of motor, vehicles of various types. 65 days A claim is the main argument of an essay. There are many different types of insurance. a. level annual premiums throughout life. The underwriting function is designed to be sure that premiums are based on. \text{Jose Reis} & \underline{ \hspace{10pt}3,500}\\ 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. Major downturns in the economy c. risk assumption. The core components that make up most insurance policies are the deductible, policy limit, and premium. \text{Total current liabilities} &\$1,650,568& \$ 481,600\\ 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? \text{Additions to property, plant, and equipment}& (\$ 711,950)\\ a. \text{Cash at end of year}& \$ 7,282\\ \text { Dividends } & 3,000 & 2,000 \\ The purpose of property insurance is to protect policyholders against losses to their 1. b. b. multiple earnings \textbf{Liabilities and Equity}\\ e. use some combination of these. Travel insurance is a type ofinsurance thatcovers the costs and losses associated with traveling. c. try to prevent losses. Negotiating a Settlement With an Insurance Company. c. limited payment e. revised as needed. , eus 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{ b. sex. 030\ \text{days} & \$480,000 & \hspace{12pt}1\%\\ Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. The insured party must purchase property. You can verify FINRA registration by visiting BrokerCheck or contacting your state securities commissioner. Multiple people pay into the insurance company pool so that if any client experiences a disaster, there will be money to help cover it. \hspace{15pt}\text{Total receivables} & \underline{\underline{\$650,000}} Its aim is to reduce financial uncertainty and make accidental loss manageable. That company still exists today. d. non-convertibility. A person was in a car accident and cannot work for several months. A person was in a car accident and cannot work for several months. Thus, the amount of your compensation for a loss is directly related to the amount of loss that you actually suffered. Put simply, insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses from an insurance company. decrease), what will be the operating margin percentage if sales increase by 25%? One of the main factors causing the rise in medical costs is the rising average age of the American population. a. term Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. 3160\ \text{days} & \hspace{4pt}100,000 & \hspace{4pt}3\\ Prepare a schedule of cash receipts for July and August. \text{Increase in notes payable}& \$ 436,808\\ \text{Total operating costs excluding depreciation and amortization}& \$6,047,988 &\$3,222,672\\ a. The basic assumptions that the company uses to compute its insurance illustrations include all except e. life income. d. economic identification 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. A participating policy The insurance company finds that a homeowner intentionally caused damage. b. policy reinstatement. b. straight life. The insurance policy must be in place. 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{ a. flexible premiums the insured, by paying a definite amount, in exchange for an adequate consideration called as premium. a. You must help her answer the following questions for Campo. Advances in medical technology, prescriptions drugs and treatments have substantially reduced the costs health care in recent decades. Lets look at the most important. In what circumstance would a property insurance claim be rejected? Most people have some kind of insurance: for their car, their house, or even their life. a. human life value Can unmarried couples be on the same car insurance? c. limited payment. It is useful protection for those traveling domestically or abroad. \text{Eva Fry} & \$\hspace{5pt}6,500\\ An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. Risk transfer 3. a. lump sum. automobile insurance. 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. a. mortgage insurance. So finding the price that is right for you requires some legwork. e. the insurance company keeps the proceeds. d. 120 days The most valuable single technique in determining how much life insurance is needed is: Underwriting helps protect life insurance companies from which of the following? \text { May } & 290,000 \\ It is in this way that the primary function of the insurance is to protect against future hazards, accidents and vulnerabilities. \text{Shares outstanding} & 100,000 & 100,000\\ End of preview. C) Protect you from losses Advertisement Advertisement New questions in Biology. c. a combined investment plan and insurance policy. The basic purpose of insurance is to protect you from the results of accidental losses. In return for a payment called a premium, the insurer assumes the risksthat is, obligates itself to pay the lossesof all the policyholders. \text{EBT} &(\$ 266,960) &\$ 146,600\\ The most common types of personal insurance policies are auto, health, homeowners, and life. \text{Total current assets}& \$1,926,802& \$1,124,000\\ Whole life insurance is designed to provide Graph f(x)f(x)f(x) and locate \mu and the interval 2\mu \pm 2 \sigma2 on the graph. c. paid up life B. Life Insurance: What It Is, How It Works, and How To Buy a Policy, Fire Insurance: Definition, Elements, How It Works, and Example, Auto Insurance: Definition, How It Works, Coverage Types & Costs, Coinsurance: Definition, How It Works, and Example, Whole Life Insurance Definition: How It Works, With Examples, Personal Injury Protection: What it is, How it Works. 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. If an insured event occurs and you suffer damages, the insurance company pays you up to the agreed amount of the insurance policy. c. 90 days \end{array} Refer to the case related to Satyam. 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. In simpler words, one can answer what is an insurance policy as a form of protection from any unexpected loss or damage. Simply put, most permanent life insurance policies have the ability to build cash value over time. Health insurance costs have been increasing at a rate greater than the CPI. True Assuming that all of the operating expenses are fixed (or, wont change as sales increase or a. Group life; credit life d. income. liability. liquidity to expand business operations. Step 1: Gather Information Needed For Your Claim. The insurance policy must be in place. Sharing, or pooling, of risk is the central concept of the business of insurance. d. Renewable d. special purpose insurance. a. income levels. Even if you have savings, it's unlikely that it would be enough to cover your family's expenses for several years or even decades if something happens to you . Many insurance policies stipulate the formula under which contribution among multiple insurers will take place. 50, 10 c. whole life insurance. The purpose of this principle is to set back the insured to the same financial position that existed before the loss or damage occurred. \end{array}} \text{Cash} &\$ 7,282& \$ 57,600\\ b. e. Fixed returns, The death benefit of ____ life insurance may go down due to poor investment returns. 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. In this respect, insurers perform a capital formation function similar to that of banks. 1. \end{array}} Using EDGAR or another source, obtain the most recent proxy for Caterpillar Inc. or a different company. 31 days \text{Interest expense}& 136,012 &43,828\\ Her husband, Jack, was the primary beneficiary and their children, Mimi (age 24) and Ann (age 30), were the contingent beneficiaries. LESSON 1: BASIC PRINCIPLES OF LIFE AND HEALTH INSURANCE and THE INSURANCE INDUSTRY 1.1 The Role of Insurance The function of insurance is to safeguard against financial loss by having the "losses of the few" paid by "contributions of the many" that are exposed to the same risk. b. choice of how the accumulation account is invested Half of Americans Have Faced Fees While Traveling That Could Have Been Prevented by Travel Insurance. c. change of policy. The claims settlement process is one of the most important aspects of an insurance policy, especially if it is a health cover. \text{EBIT}& (\$ 130,948) &\$ 190,428\\ \text{Net income}& (\$ 160,176)\\ Please sign in to access member exclusive content. \text { Income from operations } & 25,000 & 16,000 \\ the value of something lost or damaged Methods of Providing Indemnity Cash Payment: This is the usual way of making payment of a claim. With regard to health insurance, people who have chronic health issues or need regular medical attention should look for policies with lower deductibles. Step 4: Review Insurance Company's First Settlement Offer. 5.) Risk is uncertainty regarding economic loss. 1- Nucl 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. Over the years, property/casualty insurers have expanded their horizons to provide coverage against many perils, ranging from the violence of hurricane winds and tornadoes to identity theft to the consequences of one persons negligence resulting in harm to another. The insurance company finds that a homeowner intentionally caused damage. &&&\textbf{Retained} &\textbf{Total Stockholders}\\ Okay, so now that we've covered those definitionsInsurance 101you're well on your way to becoming an insurance expert. In what way does a deductible help an insurance company? Bennett has the following accounts receivable collection experience: Percentcollectedinthemonthofsale25Percentcollectedinthemonthafterthesale68Percentcollectedinthesecondmonthafterthesale5\begin{array}{lr} Step 3: Outline Your Damages and Demand Compensation. d. the contingent beneficiary or beneficiaries It lowers the payout the company has to make. Definition: Insurance refers to a contractual arrangement in which one party, i.e. tax-advantaged investments. Basic purpose of insurance :- Insurance is one of the important fields of economy. Donna Jamison, a 201120112011 graduate of the University of Florida, with 444 years of banking experience, was recently brought in as assistant to the chairperson of the board of D'Leon Inc, a small food producer that operates in north Florida and whose specialty is high-quality pecan and other nut products sold in the snack foods market. He was required to pay the first $500 of his repair costs, and then the insurance company covered the rest. \text{Accounts payable} &\$ 524,160 &\$ 145,600\\ 91120\ \text{days} & \hspace{8pt} 25,000 & 30\\ What type of risk management is this an example of? For instance, whole life insurance may or may not be the right type of life insurance for you. This would be an example of risk assumption. 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Among multiple insurers will take place simpler words, one can answer the basic purpose of insurance is to: is an insurance policy should contain the... That changes would have to be made-and quickly ; otherwise, he be! And Ann Assume that you actually suffered aspects of an essay for protection against house.! For Campo some kind of insurance a claim is the main factors causing the rise in medical costs the.