Risk Management Review

1. Risk ManagementReview Personal Finance

2. 3 • A method for spreading individual risk among a large group of people to make losses more affordable for all. • Insurance

3. 6 • The insurance policyholder should be put back in the same financial condition he was in before the loss occurred. • Indemnification

4. 7 • Government sponsored health insurance for people currently age 65 or older. • Medicare

5. 8 • Eliminate the chance for loss by never doing the activity. • Risk avoidance

6. 9 • Pay premiums throughout your entire life and beneficiaries receive a stated benefit at death. (permanent life insurance) • Straight life

7. 10 • Chances of loss involving your income and standard of living. • Personal risks

8. 11 • Wearing a seatbelt is an example of this type of strategy for dealing with risks. • Risk reduction

9. 12 • Allows the insured to stop paying premiums if they become disabled, but keep the policy. (life insurance) • Waiver of premium

10. 13 • Another name for term life. • Temporary

11. 14 • Establish a fund and assume financial responsibility for all losses. • Risk assumption

12. 16 • Group plan offering prepaid medical care to its members. • Health maintenance organization (HMO)

13. 17 • Once the policy has been in place a stated length of time, the insurer can no longer question items on the application to deny coverage. (life insurance provision) • Incontestable clause

14. 18 • List a way to save on insurance premiums. • Increase deductibles • Purchase group insurance • Consider payment options • Paying monthly is usually more expensive • Look for discount opportunities • Comparison shop

15. 19 • Chances of loss or harm to personal or real property. • Property risks

16. 20 • Makes regular payments to replace lost income when illness or injury prevents the insured from working. • Disability insurance

17. 21 • A company collects premiums from employees to pay medical benefits. • Based on mathematical probability. • Assumes only a very few employees will need extensive medical services. • Self-Insurance Plans

18. 22 • Renting a house instead of buying one is an example of this type of strategy for dealing with risk. • Risk avoidance

19. 23 • Government-sponsored health insurance for people with low incomes and limited resources. • Medicaid

20. 24 • Chances of loss that may occur when your errors or inappropriate actions result in bodily injury to someone else or damage to someone else’s property. • Liability risks

21. 25 • Gambling is this type of risk. • Speculative risk

22. 26 • Plan for sharing the risk of high medical costs resulting from injury or illness. • Health insurance

23. 27 • Why are group policies less expensive? • Spread the risk among many people.

24. 28 • An organized strategy for controlling financial loss from pure risks. • Risk management

25. 29 • A chance of loss with no chance for gain. This type of risk is insurable. • Pure risk

26. 30 • Beneficiary is paid twice the face amount. (life insurance) • Double indemnity

27. 31 • What is COBRA insurance? • Allows people who leave employment to continue their health insurance under the company plan for a limited period of time (usually 18 months).

28. 32 • Protects renters from property and liability risks. • Renter’s insurance

29. 33 • Provision that specifies how the insurers will share the cost when more than one policy covers a claim. • Coordination of Benefits

30. 34 • Person who determines the value of the property destroyed. • Claims adjustors

31. 35 • Take measures to lessen the frequency or severity of losses that may occur. • Risk reduction

32. 36 • A group of healthcare providers who band together to provide health services for set fees. • Preferred provider organization (PPO)

33. 37 • Small insurance policy that modifies the coverage of the main policy. • Rider

34. 38 • Must prove you are disabled. • Must have a physical or mental condition that prevents you from working. • Condition must be expected to last 12 months or lead to death. • Benefits determined by your pay and the number or years you have been covered under Social Security. • Social Security disability

35. 39 • People who look for evidence of destroyed or damaged property. • Insurance investigators

36. 41 • Covers your expenses if your injury or illness resulted from your job. • Worker’s compensation insurance

37. 42 • Investing in the stock market is an example of this type of risk. • Speculative risk

38. 43 • Predict the probability of death at different ages. Premiums are based on these tables. • Mortality tables

39. 44 • A(n) ___________ is a written amendment to an insurance policy. • Endorsement

40. 45 • Coverage for the insured’s moveable property wherever it may be located. • Personal property floater

41. 48 • This coverage covers property when it is in your home or when it is with you away from home. • Theft and vandalism coverage

42. 49 • A risk that may result in a loss or gain. • Speculative risk

43. 50 • This type of coverage pays for temporary housing while the house is being repaired or rebuilt. • Physical damage coverage

44. 51 • Requires policyholders to insure their building for a certain percentage of its replacement value in order to receive full reimbursement for a loss. • Co-insurance clause

45. 52 • Driving a car is an example of this type of risk. • Pure risk

46. 53 • Covers claims for bodily injury to another person or damage to another person’s property. • Liability coverage

47. 54 • Protection provided by the terms of an insurance policy. • Coverage

48. 55 • The portion of a paid premium that the insurer has not yet earned because the policy term has not ended. • Unearned premium

49. 56 • A table of premium rates based on ages and life expectancies. • Actuarial table

50. 57 • A specialist in insurance calculations and statistics. • Actuary