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17 Cards in this Set
- Front
- Back
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Insurance
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Pooling of fortuitous losses by transfer of such risks to insurers, who agree to indemnify insureds for such losses |
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Pooling
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Spreading of losses incurred by the few over the entire group |
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Law of Large Numbers
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The greater number of exposures will lead to a greater number of losses |
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Fortuitous Loss
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One that is unforeseen and unexpected by the insured and occurs as a result of chance |
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Risk Transfer
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Pure risk is transferred to insurer
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Indemnification
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The person who is insured will return to prior financial situation before the loss |
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Insurable Risk
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* Large number of exposure units * Accidental loss * Measurable loss * Not catastrophic loss * chance of loss is calculable * premium is economically feasible |
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Reinsurance
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Primary insurer transfers to another insurer
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Adverse selection
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Person with Higher-than-average loss rate seeks insurance with standard rates |
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Underwriting
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Process of selecting and classifying applicants for insurance |
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Life insurance
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Pays death benefits to designated beneficiaries |
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Property Insurance
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indemnifies property owners against the loss or damage of real or personal property |
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Liability Insurance
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legal defense costs are paid
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Casualty Insurance
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Broad field of insurance that covers whatever is not covered |
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Personal Lines
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Coverage's that insure the real estate and personal property |
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Commercial Lines
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Property and casualty coverages for business firms |
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Social Insurance
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Government insurance programs with certain characteristics that distinguish them from other government insurance plans |
