Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Personal Finance > Insurance > Flashcards

Insurance Flashcards

1
Q

What is risk?

A

The chance of economic loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What risk management choices can one take?

A

1) Risk avoidance: avoiding risk

2) Risk assumption: accepting risk

3) Risk prevention: reducing chance of losses

4) Risk control: reduce severity of losses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Why is it economically feasible for insurance companies to assume risk?

A

they combine losses from large numbers of people and use past experience to calculate probability occurrence and amount of loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Who needs life insurance?

A

People who provide financial support to others, and also have debts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How do you compute how much life insurance you need?

A

there are two ways:

1) multilples method: just multiply annual earnings by 5 or 10 (simple, but fails to recognize financial obligations)

2) Needs analysis method: estimate the needs and examine available resources (additional insurance needed = financial resources needed after death - financial resources available after death)

in case of health insurance: “replacement method”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what are the 3 basic types of life insurance?

A

1) Ordinary: 1 person, long term coverage, medium to high income, premium payable time is flexible. Only one with medical check up, sum insured is high

2) Industrial: 1 person, low income, monthly premium payment, sum insured is low

3) Group: >5 or 10 people, sum insured depends on rank, flexible premium payment timing, no medical checkup

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Differences between term, whole, endowment, and annuity life insurance

A

term: sum paid at death (lowest premium)

whole: sum paid at death or at 90/99

endowment: sum paid at death ot at the end of a prespecified period

annuity: sum paid periodically after the insured retires (highest premium)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what % should the insurance premium be?

A

15 - 20 % for singles (riskier category)

10 - 15 % for couples

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is health insurance for?

A

1) it protects against economic loss in the event of accidents or illnesses

2) it protects against the rising cost of healthcare

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q
A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is govermnent provided healthcare?

A

1) healthcare provided to government employees

2) social security benefits required for private sector employees

3) universal healthcare coverage for self employed citizens and those not covered by SS or government welfare

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Talk about social security benefits

A
  1. they are mandatory for enterprises hiring at least 1 employee
  2. SS contribution is 5% of salary for employer and employee or 2.5% of salary for government
  3. monthly salary has to be between 1650 thb and 15000 thb
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What can medical expense insurance cover (partially)?

A
  1. hospitalization
  2. surgical expenses, cosmetic or experimental surgery excluded
  3. physician expenses, including consultation and lab tests
  4. dental services
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what other types of health plans are you aware of? excluding medical expense insurance

A
  1. accident policies, cover certain accidents
  2. sickness policies / dread disease policies cover specific disease or illness
  3. hospital income policy guarantee a per diem for hospital stays
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is “coordination of benefits”?

A

a concept that eliminates double payment when coverage is provided under more than one policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what are 4 cost containment provisions that health insurers take to “contain costs”

A
  1. pre admission certification for visits
  2. continued stay review (don’t overstay in the hospital)
  3. second surgical opinions (hopefully it’s nothing)
  4. co-insurance, conditions under which policy holders and insurance companies split expenses
17
Q

What is long term care insurance?

A

medical care to person with chronic conditions

18
Q

what are provisions?

A

features and options included in an insurance policy

19
Q

list common provisions found in health insurance contracts

A
  1. type of care provided
  2. eligibility requirements
  3. services covered
  4. daily benefits
  5. benefit duration

slide 48

20
Q

what are some conditional provisions found in health insurance contacts?

A
  1. waiting period
  2. renewability
  3. inflation protection
  4. premium levels

slide 48

21
Q

what is disability income insurance?

A

payments to replace income lost when insured is unable to work due to an illness, injury, or disease

22
Q

how do you estimate ADDITIONAL disability income insurance needs?

A

Monthly take home pay - existing monthly benefits (ss, gov programs, company dis benefits, group dis benefit) = monthly disability benefits needed

23
Q

What is “probationary period”?

A

How long after the policy is issued before benefit privileges are available

23
Q

What is property insurance?

A

Insurance that protects real and personal property from losses from various perils

24
Q

What is the waiting period?

A

how long before the benefits from insurance coverage materialize after the peril happened

25
Q

what is liability insurance?

A

insurance protecting against financial responsibility from damage caused either through actions or negligence

26
Q

What is the principle of indemnity?

A

A principle stating that an insured person may not be compensated by insurance company an amount exceeding economic loss

27
Q

What is the actual cash value?

A

actual cash value = replacement cost - depreciation

28
Q

what is the right of subrogation?

A

the insurer’s right to request reimbursement

29
Q

What is a peril?

A

a peril is a cause of loss

30
Q

which factors might affect home insurance costs?

A
  1. type of structure
  2. location of home
  3. credit score
31
Q

what limitation on payments exist?

A
  1. replacement cost
  2. policy limits placed on covered property
  3. internal limits applicable to specific items(basically the insurer limits exposure on high value items such as jewelry or watercraft)
32
Q

what are deductibles?

A

amount paid out of pocket before the insurance policy starts paying for covered expenses. This mechanism discourages policyholders from making small claims because they must pay the deductible amount first before the insurance coverage kicks in.

33
Q

what is a captive insurance agent?

A

an agent which represents one insurance company only

34
Q

what is an independent insurance agent?

A

an agent which represents multiple insurance companies

35
Q

what are the three steps in claim settlement?

A
  1. notice to insurance company
  2. investigation
  3. proof of loss
  4. claims are then adjusted or denied

Personal Finance (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions