Fundamentals of Risk & Insurance Quiz #1 SG

Million Dollar Roundtable

An association of life insurance agents who qualify by selling $1 million worth or more of life insurance coverage

Why should a person have Life Insurance?

Because it provides protection against premature death and longevity and also risk of financial probation

What 3 speakers did we have in class?

Cliff Tucker, Clifford Thompson, & Billy Roberts

Example of a Risk

Driving too fast

New Type Risks

Environmental damage (ex. BP settlement), discrimination in employment, sexual harassment, and identity theft

Example of Peril

Fire, windstorm, hail, or theft; each of these is the cause of a loss that occured

Types of Insurance

Life, health, disability, property & casualty, workers compensation, breakdown, & credit life

What are the two largest types of Social Insurance?

Medicare & Social Security

3 Classifications of Risks

Personal, Property, & Liability

Why study insurance?

Preparation for a career in insurance, and the average person will spend big portion of their income on insurance over a lifetime

Who is the author of the textbook?

Therese M. Vaughan

Peril

a cause of a loss

Hazard

a condition that may create or increase the chance of a loss arising from a peril

C.L.U. (Chartered Life Underwriter)

a professional designation for individuals who wish to specialize in life insurance and estate planning

CPCU (Chartered Property and Casualty Underwriter)

a professional designation in property-casualty insurance and risk management

Private Insurance

consists mostly of voluntary insurance programs available to individual as means of protection against possibility of loss

Example of Christopher Columbus Risk

go out to far fall of the earth

Personal Risks

includes death, injury, or disability

Clifford Thompson

is Insurance lobbying

Cliff Tucker

is Risk Management

Billy Roberts

is an Insurance Company President

What makes a Risk Insurable?

large enough to make losses predictable; loss must be measurable; & loss must be accidental

Safety Systems that reduce risks

limiting hours of truck drivers

Property Risks

loss by fire, tornado, or hurricane

Actuary

people who predict losses and charge a premium based on the loss

What does Medicare cover?

public guarantee insurance programs, F.D.I.C., and N.C.U.A

Insurance

shifting of a risk from one individual to a group or a sharing of losses

Moral Hazard

the increase in the probability of loss that results from dishonest tendencies in the character of an insured personn

Liability Risks

the unintentional injury or other persons or damage to their property through negligence or carelessness

Social Insurance

this is compulsory insurance usually operated by government whose benefits are determined by law and the primary emphasis is on social adequacy

Risk Avoidance

this is when decisions are made to prevent a risk from coming into existence

Purpose of Risk Management and Risk Manager

to eliminate & reduce possibility of risk or losses

What is a Risk?

uncertainty about the outcome or an exposure to a loss

Medicare

used to cover old people