Basic concepts
Which participant in an 'insurance relation', issues the policy?
Insurer
Under the principle of 'Subrogation', what right does the insurance company gain?
recover from a third party
Which type of insurance is cited as having 'saving components' related to marriage or birth?
Life insurance
Which events is associated with the 'Savings and investment' of life insurance?
marriage, childbirth, or education
True or False:
The principle of Indemnity allows a policyholder to profit from a loss if they have multiple policies?
False
In the context of 'insurance relations', what is the formal term for the contract?
insurance policy
If a loss is covered by two different insures, what principle determines how the payment is shared?
Principle of contribution
This type of insurance provides financial protection against damage or loss to physical assets such as homes, vehicles, or equipment.
property insurance
How does health insurance perform a preventive function according to the material?
promoting preventive care and early treatment
According to the principle of 'Contribution', if an item is worht $1000 and you have two insurers, what is the maximum total amount you can recieve?
$1000
Insurance is defined not just as a finanial product, but as what type of tool?
a risk managment tool
According to the principle of 'Insurable Interest', what is the requirement for a person to insure something?
having a financial stake in the insured item or person
This type of insurance covers legal responsibility to others, unlike insurance that protects your own assets.
liability insurance
Which principle is concerned with the most direct or the nearest cause of a loss?
proximate cause
The 'social function' is listed as which number in the sequence of insurance functions?
4
The principle of 'Utmost Good Faith' reqiures that both parties must be honest, specifically by avoiding what?
concealment of material facts
Which type of insurance combines protection against death with a savings or investment component, often used to plan for future life events?
Life Insurance
Which function of insurance focuses on the actual reimbursement of the financial loss to the insured?
Compensation function
Why is insurance considered both a risk transfer and a risk management tool?
it transfers financial loss to the insurer while helping individuals or businesses plan and reduce risks
In 'insurance relations', what is the term for the entity that purchases the policy?
Insured
Which principle states that an individual should only recieve compensation for their actual loss?
Indemnity
This insurance type usually has short-term coverage for property or liability, unlike policies that may last a lifetime and include savings.
non-life insurance
Workplace safety programs are provided as an example of which function?
Preventive function
How does adverse selection affect an insurance company’s risk pool and premiums?
it causes high-risk individuals to buy more insurance, increasing the insurer’s risk and potentially raising premiums for everyone