Ch. 8 Finance

_______ is an activity that reduces that a loss will occur Loss prevention
What is a risk avoidance? Risk avoidance is any activity that helps evade an act that creates a risk
A life insurance policy can be structured so that the death benefits are paid directly to a named beneficiary, which means ________ The cash benefits from your life insurance policy cannot be claimed by creditors
Underwriters can predict whether or not you will suffer a loss this year. True or False? False
The need for life insurance increases with children. True or False? True
__________ is any activity that lessens the severity of the loss once it occurs. Loss control
The settlement options chosen by most policyholders is: Lump Sum
___________ is the choice to accept and bear the risk of loss. Risk assumption
In order to predict the number of losses that will occur in a given time accurately, insurance companies must study a ______ number of cases. Large
__________ insurance is a type of insurance that is issued in policies with small face amounts often $1,000 or less. Industrial life
A life insurance policy can be structured so that death benefits are paid directly to a ________ which means that creditors cannot claim the cash benefits from the policy Named beneficiary
By __________ insurance companies decide who will be insured by them Underwriting
It is not possible to avoid ___________ Most risks in your life
A life insurance agent who takes her profession seriously is likely to have earned a professional certification like the ________ Chartered Life Underwriter
What leads to the payment of a higher insurance premium by the potential insured? Obesity of the potentially insured
A __________ policy is a contract between an individual and a company under which the company agrees to reimburse the individual for losses suffered by him or her according to specified terms. Insurance
Risk avoidance involves asking an insurance company to take over the risk for a small payment. True or False? False
What type of insurance policy provides temporary coverage for a set period? Term life insurance policy
The probability of a loss occurring can be reduced by ________ Loss prevention
A __________ policy is a type of term insurance Straight term
It can be difficult to evaluate the true cost of a ________ at the time of purchase. Universal life insurance
Group life insurance is: An insurance that provides a master policy for a group.
The policy owner assumes the investment risk with a _________ insurance policy variable life
_______ determines the amount of life insurance coverage required for an individual by considering his or her other financial obligations and available financial resources in addition to life insurance The needs analysis method.
The primary purpose of a life insurance plan is to help: In the protection of the dependents of the insured from financial loss in the event of his or her untimely death.
While using the needs analysis approach, we ________ Deduct an individual’s available resources from his or her family’s total economic needs to calculate how much life insurance he or she requires.
It is advisable to purchase life insurance from an insurance company that has been in business for at least ____ years 25
Insurance underwriting is best described as: The process used by insurers to decide who can be insured and to determine applicable rates that will be charged for premiums.
Social Security survivor’s benefits are intended to provide basic, minimum support to families faced with the loss of the principal wage earner. True or False? True
An individual’s need for additional life insurance can be determined by looking at the difference between his or her family’s available financial resources after his or her death and his or her family’s total economic needs. True or False? True

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