Chapter 21 Flashcards
annuity
An insurance product that provides a fixed
stream of payments.
casualty insurance
Protection against financial losses because of a claim of negligence.
certainty equivalent
An amount that will be received
or spent with certainty. An insurance payment is a
certainty equivalent, since it removes the risk that
unexpected amounts will need to be spent.
coinsurance
An insurance policy under which the
policyholder bears a percentage of the loss along
with the insurance company.
deductible
An amount of any loss that must be paid
by the insured before the insurance company will
pay anything.
defined benefit plan
A pension plan in which
the benefits are stated up front and are paid
regardless of how the investments perform
defined contribution plan
ERISA
fully funded plan
law of large numbers
monoline insurance companies
mutual insurance companies
named peril policies
open peril policies
overfunded plan
