2. Insurance Planning & Risk Management Flashcards
Cause of Loss (fires, tornados, heart attack, etc)
Peril
Policies that specifically identify a list of covered perils
Specified-Perils Contract
Covers all losses except those specifically listed
Open-Perils Contract
Exaggerating losses in theft claim
Leaving car unlocked because you know insurance will cover it
Which is Moral Hazards and which is Morale Hazards
Moral Hazards
Morale Hazards
Most likely maximum amount of damage a peril might cause under average circumstances.
Total amount of financial harm a given loss could cause under the worst circumstances.
Which is Maximum Possible Loss and which is Maximum Probable Loss?
Maximum Probable Loss
Maximum Possible Loss
Provides a minimum level of protection restricted to perils of fire, theft, vandalism and extended coverage.
Basic/Standard Coverage, Broad Form Coverage or Special Coverage?
Basic/Standard Coverage
Includes basic coverage plus 16 perils.
Basic/Standard Coverage, Broad Form Coverage or Special Coverage?
Broad Form Coverage
Provides coverage on an open-peril basis which also includes coverage for theft.
Basic/Standard Coverage, Broad Form Coverage or Special Coverage?
Special Coverage
These cover single-family, residential homes?
HO-2, HO-3, HO-4, HO-5, HO-6, HO-8
HO-2, HO-3 & HO-5
Which one covers contents and personal liability of renters?
HO-2, HO-3, HO-4, HO-5, HO-6, HO-8
HO-4
Which one covers contents and liability of condo/co-op owners?
HO-2, HO-3, HO-4, HO-5, HO-6, HO-8
HO-6
Which one covers homes with a replacement cost greater than FMV which is usually historic homes?
HO-2, HO-3, HO-4, HO-5, HO-6, HO-8
HO-8
Homeowners Insurance: Section 1 (Property)
Insures home and all attached structures. Which does it NOT cover (wind, floods, fire, earthquakes, sink holes and hail)?
Coverage A, B, C, D
Coverage A and does NOT cover floods, earthquakes and sink holes
Homeowners Insurance: Section 1 (Property)
Insures other structures (up to __% of Coverage A). Covers garage, barn, fences, swimming pools.
Coverage A, B, C, D
Coverage B and 10%
Homeowners Insurance: Section 1 (Property)
Insures personal property (up to __% of Coverage A). Covers computers, jewelry, rakes, etc.
Coverage A, B, C, D
Coverage C and 50%
Homeowners Insurance: Section 1 (Property)
Insures Loss of Use (up to __% of Coverage A). Covers moving costs, storage, hotel/rental.
Coverage A, B, C, D
Coverage D and 20%
Homeowners Insurance: Section 2 (Liability)
Insures personal liability from $100,000-$1,000,000.
Coverage E, F
Coverage E
Homeowners Insurance: Section 2 (Liability)
Insures medical payments to others. $1,000-$5,000/person, per incident.
Coverage E,F
Coverage F
Occurs if the vehicle collides with or is struck by another object while in use.
Collision or Comprehensive Coverage?
Collision Coverage
Accidents that occur not because of a collision.
Collision or Comprehensive Coverage?
Comprehensive Coverage
Operate in limited geographic areas, providing members with broad health care coverage in exchange for a set fee called a capitation payment. The employer pays a fixed periodic premium in advance to cover medical care services for each participant in the plan.
HMO or PPO?
HMO
An association of cooperating physicians and hospitals. The employer’s cost is determined by use with a fee for each use. Covered employee do NOT have to use the personnel or facilities of the plan. If they use a non-plan provider, the employees pay higher costs.
HMO or PPO?
PPO
ADLs….name them?
Eating
Bathing
Dressing
Toileting
Continence
Transferring
Each partner can purchase life insurance on every other partner.
Cross-Purchase Plan or Entity Plan?
Cross-Purchase Plan
Partnership purchases the insurance on each partner.
Cross-Purchase Plan or Entity Plan?
Entity Plan
Taxation of annuities post 8/13/1982….
FIFO or LIFO?
LIFO
1035 Exchanges (Which is not allowed?):
Endowment Contract -> Annuity
Annuity -> Annuity
Annuity -> Life Insurance
Life Insurance -> Endowment Contract
NOT allowed: Annuity -> Life Insurance
