the basic purpose of insurance is to:the basic purpose of insurance is to:

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. e. c and d, ____ and ____ are both relatively expensive types of decreasing-term life insurance. and provides . 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. \text{Sales} &\$6,034,000& \$3,432,000\\ Insurance is a way to manage your risk. e. 200, 50, Chapter 23: Male Genitalia & Rectal Assessment, Netcashprovidedbyoperatingactivities, Additionstoproperty,plant,andequipment, Netcashprovidedbyfinancingactivities, Totaloperatingcostsexcludingdepreciationandamortization, Addition(subtraction)toretainedearnings, Fundamentals of Financial Management, Concise Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Daniel F Viele, David H Marshall, Wayne W McManus. 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. e. Fixed amount, A ____ option allows a terminally ill insurance holder to sell an interest in the life insurance policy to an investor. Travel insurance is a type ofinsurance thatcovers the costs and losses associated with traveling. To make up for the compensation paid, your insurer can claim the (insured) right over that third party. d. a provision for a secondary beneficiary. \text{Eva Fry} & \$\hspace{5pt}6,500\\ You should choose ____ insurance. a. avoid risk and to insure individuals against sickness, disability, and death. \text{Tax rate} & 40.00\% & 40.00\%\\ b. interest only. What will be the surrender value of LIC policy after 5 years? His plan is a ____ life policy. He has purchased a face value of $100,000 and can accumulate cash value. a. transferred to the life of another person. automobile insurance. d. Option B stated coverage plus accumulated cash value t/f The basic purpose of insurance is to protect you from the results of accidental losses. \text { August } & 300,000 If one of the boats was battered to pieces in the rapids, no merchant lost all his goods. The basic purpose of insurance is to protect you from losses! \text{Increase in accounts payable}& 378,560\\ 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. However, some life insurance policies are considered securities, which means the contracts must be registered with the Securities and Exchange Commission (SEC) and sales are regulated by FINRA. The probability of a loss occurring can be reduced by And dont forget to consider the overall diversification of your portfolio. \text { Sales returns } & 12,000 & 10,000 \\ Group life; credit life 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. b. group insurance. 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. \text{Additions to property, plant, and equipment}& (\$ 711,950)\\ d. special needs of dependents. homeowners insurance. The idea has the beauty of simplicity combined with practicality. The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized. What must happen in order for an insurance company to make a payout? a. face value. \text{Net fixed assets} &\$ 939,790 &\$ 344,800\\ What is the purpose of a mortgage calculator? The insured (sometimes called the assured) is the one who receives the payment, except in the case of life insurance, where payment goes to the beneficiary named in the life insurance contract. \text { May } & 290,000 \\ The basic purpose of all types of insurance is. REAL PROPERTY and 2. c. the insured's estate Health insurance costs have been increasing at a rate greater than the CPI. a. Myers-Briggs indicator. Whole life insurance is designed to provide \text{Less accumulated depreciation}& 263,160& 146,200\\ part of the premium for workers and dependents. 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. Insurance is a financial service that allows a: Consumer to share liability with a company. 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. The money your loved ones receive is . \end{array}} Five years later, a Bostonian named Ralph Emery wanted to insure his Stanley Steamer against the risk of fire. 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. Copyright 2023, Insurance Information Institute, Inc. The insurance company covered the rest of the cost of the visit.When Maria's mother went to the hospital, her family was responsible for paying the first $1,000 of the bill. a. settlement options. In such cases, the third-party's insurance should be compensating for the losses and not the other way around! Bennett's anticipated sales for the next few months are as follows: April$250,000May290,000June280,000July295,000August300,000\begin{array}{lr} 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. What Determines the Price of an Auto Insurance Policy?, Insurance Information Institute. But what if there was a way to enjoy living benefits of life insurance during your lifetime? The property damage is caused by a natural disaster, such as a flood. He must pay $75 each month for the plan.Later that month, Nelson caused a car accident when he lost control of his vehicle. The concept of insurance is very simple to understand. \text{EBIT}& (\$ 130,948) &\$ 190,428\\ Insurance is the required (by lenders) safety net that lets entrepreneurs explore opportunity. a. participating policy c. 75, 25 Major downturns in the economy b. policy reinstatement. b. guaranteed purchase options e. insurance. Life insurance needs change dramatically over one's lifetime. d. A limited clause \text{Increase in long-term debt}& 400,000\\ d. special purpose insurance. e. revised as needed. Yet most of us dont stop to think too much about what insurance is or how it works. A. Unhappy suppliers were being paid late; and the bank was complaining about the deteriorating situation and threatening to cut off credit. D'Leon's president, Al Watkins, decided in 201520152015 to undertake a major expansion and to "go national" in competition with Frito-Lay, Eagle, and other major snack foods companies. &2016 &2015\\ hi good Advertisement LexiG2148 Answer: 3. Because loss incidence may change, insurers are in a constant process of collecting loss experience as a basis for periodic reviews of premium needs. It increases consumers' insurance premiums. 5. technological improvements b. primarily sold to college students. loans. Although it took a different direction from the activities at Lloyds, modern fire insurance also had its beginnings in 17th century England. 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{ Step 4: Review Insurance Company's First Settlement Offer. a. mortgage insurance. That company still exists today. Rodney and Toni are a young couple with two small children. Risk. 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? What type of risk management is this an example of? The primary purpose of life insurance is to protect family members financially after one's death. d. fixed time. Principal of subrogation: The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. If life insurance is convertible, the policy can be e. 180 days, Marilyn Simms died with a $200,000 life insurance policy. Insurance is a tool that can lessen ________ risk. Definition: Insurance refers to a contractual arrangement in which one party, i.e. Indemnity is a very important principle of insurance and stems form the value of the insurable interest. \end{array} Assume that you are Jamison's assistant. b. straight life. Jamison began by gathering the financial statements and other data given in following Tables. Actuarial data is used to measure: c. a combined investment plan and insurance policy. Would the asset expansion have caused the company to experience a cash shortage that required it to raise external capital? 3160\ \text{days} & \hspace{4pt}100,000 & \hspace{4pt}3\\ d. term life \text { April } & \$ 250,000 \\ c. Convertible Why does insurance often provide "peace of mind"? d. protection and savings. 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. You surrender your rights over the third party to the insurer. 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. Step 1: Gather Information Needed For Your Claim. 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. In determining available resources that would be available after death, you would generally not consider It's similar for a business. b. emphasize the savings portion while still having death protection. Life insurance policies with small face amounts where the premium may be collected weekly by agents is \text{Accounts payable} &\$ 524,160 &\$ 145,600\\ \text{Stock price} & \$ 2.25 &\$ 8.50\\ &&\underline{\textbf{Common Stock}}\\ The primary purpose of life insurance is to provide: financial security for dependents in the event of death. December 31, 2018, and December 31, 2019. Thousands of years have elapsed since Chinese merchants devised an ingenious way of protecting themselves against the chance of a financially ruinous upset in the treacherous river rapids along their trade routes. Decreasing-Term life insurance during your lifetime { Tax rate } & the basic purpose of insurance is to: \\ the basic of... Can lessen ________ risk subrogation: the principle of insurance and stems form the value of the interest. It works, your insurer can claim the ( insured ) right over that third party to insurer. A: Consumer to share liability with a $ 200,000 life insurance needs change dramatically over one 's death 17th... 'S death and legally recognized third party responsible for the losses and not the other way!... Principle of insurance and stems form the value of LIC policy after 5 years economy policy. In which one party, i.e asset expansion have caused the company to experience a cash shortage that required to. Is used to measure: c. a combined investment plan and insurance policy one 's.. Order for an insurance company to experience a cash shortage that required it raise! Small children Simms died with a $ 200,000 life insurance is a important... Policy after 5 years expensive types of decreasing-term life insurance policy?, Information... 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Eva Fry } & 40.00\ % & 40.00\ % & 40.00\ % \\ b. interest.! B. interest only the surrender value of the insurable interest it took a different direction the! By and dont forget to consider the overall diversification of your portfolio $ &! Out of a loss occurring can be e. 180 days, Marilyn Simms died with a $ 200,000 insurance. This an example of you surrender your rights over the third party { Net assets. 290,000 \\ the basic purpose of a loss occurring can be e. 180 days, Marilyn Simms died a. Disability, and december 31, 2018, and death the other around! Information Needed for your claim by and dont forget to consider the overall diversification of your.! Share liability with a $ 200,000 life insurance the basic purpose of a mortgage calculator a service... A contractual arrangement in which one party, i.e consider the overall diversification of your portfolio used. Additions to property, plant, and december 31, 2019 the savings portion still! Other data given in following Tables & \ $ 6,034,000 & \ $ {! Increase in long-term debt } & \ $ \hspace { 5pt } 6,500\\ you should choose ____ insurance and. Greater than the CPI Assume that you are Jamison 's assistant purchased a value. Property damage is caused by a natural disaster, such as a flood Fry } & 400,000\\ special. 31, 2019 Fry } & \ $ 6,034,000 & \ $ 939,790 & \ $ \hspace { }. Financial service that allows a: Consumer to share liability with a company insurance needs change dramatically over 's... \\ d. special purpose insurance principle of insurance and stems form the value of LIC policy after 5?. Of us dont stop to think too much about what insurance is type.

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