Exam (elaborations)
Michigan Credit Insurance Study Guide 2024
- Course
- Institution
Michigan Credit Insurance Study Guide
[Show more]
Content preview
Michigan Credit Insurance Study GuideDefinintion of Insurance - Answer -"A social device for transferring risk through an
accumulation of funds"
Policy - Answer -A contract with the insurance company (insurer) that states what the
policyowner (insured) must pay for and what they agree to cover if damage or loss
occurs.
Premium - Answer -A set amount that must be paid for a Policy.
Concept of Risk - Answer -Risk evolves from uncertainty - the unpredictable chance
occurrences of everyday life, which result in financial or economic loss.
Life insurance addresses the financial impact of ____________. - Answer -Premature
Death
Speculative Risk - Answer -Involves the chance of winning or losing. It is a win-lose
situation.
Pure Risk - Answer -Creates only financial loss. It's a lose-lose situation.
Insurance only deals with _______ risk. - Answer -Pure
Ways to Manage Risk - Answer -- Avoidance
- Reduction
- Retention
- Sharing
- Transfer
Elements in Insurable Risks:
The loss.. - Answer -- Must Be Preictable
- Must Be Definite
- Must Be Due to Chance
- Cannot Be Catastrophic
- Exposure Must Be Large
, Law of Large Numbers - Answer -The larger number of similar risks, the more accurate
the prediction of loss will be over a period of time.
Mortality Table - Answer -Contains statistical information related to the probability of
death occurring at specific ages.
Mortality Expense - Answer -The cost of death protection.
Stock Insurance Company - Answer -Owned by its stockholders, policyholders DO NOT
participate in dividends.
Mutual Insurance Company - Answer -Owned by policyholders, policyholders DO
participate in dividends.
Fraternal Benefit Society - Answer -Promotes social and charitable activities, markets
insurance products to its members.
Lloyd's of London - Answer -Underwrites insurance, and is NOT an insurer.
Service Providers - Answer -Provides medical services to its subscriber.
Self-Insurers - Answer -A corporation establishes a fund to pay claims. Buys "stop-loss"
coverage for excess amounts.
Government Insurers - Answer -Rely on tax dollars to fund social insurance programs.
Authorized Company - Answer -An insurer licensed or chartered to transact insurance in
Michigan; is admitted to do business in the state.
Unauthorized Company - Answer -An insurer not licensed to transact insurance in
Michigan; not admitted to do business in the sate.
Insurance Company Rating - Answer -Protects condsumers from the insurance
company becoming insolvent. Rating is based on the level of reserves, claims,
amanaement, and investments. (A+ - F)
Structure: Sales and Marketing - Answer -Responsible for the developnment of
products, collecting premiums, licensing, recruiting, training, and advertisement.
Structure: Actuarial - Answer -Gathers statistical information to help with rate setting.
Structure: Underwriting - Answer -Reviews potential insured, gathers information,
classifying to accept or reject a proposed insured.
Structure: Claims - Answer -Investigates and pays claims, also guards against
fraudulent claims.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller mereka. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79373 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now