Risk Management and Insurance Flashcards
An insurance claim payout of the cash value of an insured item, minus depreciation, if the item is damaged, lost, or stolen.
Actual Cash Value
A table of statistical data, derived using calculus and the laws of probability, that shows the likelihood of a risk, such as death, occurring to an individual in a certain profile (which can include age, gender, location, race, medical history, etc.).
Actuarial Table
A small amount that an insured employee is responsible for paying when he or she visits a physician or a dentist.
Copay
The maximum amount of money an insurance company will pay for a given injury or ailment within a given period of time.
Coverage Limit
An amount (typically a few thousand dollars) that an employee must pay for medical or dental care before insurance begins paying.
Deductible
The loss in monetary value of an item based on such factors as the length of time it’s been owned plus normal wear and tear since its purchase.
Depreciation
A system of risk transference in which a third party (the insurer) agrees to assume a certain degree of financial liability if a given scenario comes to pass. If the risk does become actual, the insurer will financially compensate the policyholder for a previously agreed upon amount.
Insurance
A term used to describe the ways in which a company plans to cope with risk. A resilient company is the goal of the risk management process.
Resiliance
A request to be paid as agreed in the insurance contract.
Insurance Claim
A contractually agreed amount of money that a policyholder pays each month or each quarter to the insurance company.
Insurance Premium
A mathematical principle underlying the reasoning that the greater the number of companies insured, the more likely that the insurer can predict the percentage and amount of losses over a given period of time
Law of Large Numbers
A dollar amount calculated by the insurance company to represent the cost of replacing your property with new items of the same type and quality.
Replacement Cost
A term that refers to a state of uncertainty about events in the future. In common usage, it’s defined as the chance or possibility something might go wrong as well as what happens if something goes wrong.
Risk
A concept wherein individuals save enough money to pay for health or medical expenses themselves rather than buying health or dental insurance and paying monthly premiums to an insurance company.
Self Insurance
