MODULE 5 -- MANAGING RISK
Terms in this set (30)
seeking ways of not taking the risk, if possible. Ex. A person who wants to avoid the risk of borrowing would not take the loan at all.
Taking the risk and accepting ownership of any and all outcomes that may come from it. Ex. A person who wants to assume the risk of borrowing would take the loan and be prepared to deal with any fallout of not paying it back.
Seeking ways of taking the risk, while lessening the likelihood or severity of a negative outcome. Ex. A person who wants to reduce the risk of borrowing would seek the best possible terms of a loan, to make it less likely there will be trouble paying it or to make the consequences less severe if he or she can't repay it.
Give ownership ownership of the financial risk that comes from an everyday risk to someone else. Ex. When a person purchases an insurance policy.
Protection against possible financial loss by transferring the risk to someone else.
Places that provide insurance
The chance of loss from an event that cannot be entirely controlled
A set amount of money that must be paid by a person with insurance to cover part of the expense of a loss. They must be paid before insurers will begin to pay.
Injury, property damage, or loss of income.
The amount of money that a consumer pays to a provider for insurance. It is a predetermined fee that is paid on a regular schedule.
Insurance providers organize risk pools to distribute, or spread, the risk of some kinds of financial losses. These financial losses are related to risks faced by all members of the pool.
Protects against financial losses if the insured person is responsible for injuring someone else or damaging someone else's property.
Insurance that people are required to have by the government or lender (car loan, mortgage, etc.)
Insurance that covers medical illness or injury.
Protects against most types of property losses and liabilities related to home ownership.
Covers your personal property in a rented apartment or home.
Insurance paid to named beneficiaries when the insured person dies.
Legal contract between a consumer and an insurance provider. The policy describes the details of the insurance agreement.
A request to have an insurance provider make a payout for a loss.
What is insured, for how much, and when the provider will make a payout.
Something that is not covered by an insurance policy.
The max amount of money that a provider will pay.
A person who has insurance.
Professionals who sell insurance to customers and work for insurance providers either directly or as outside salespeople.
Predetermined amount of money paid to an insurance agent for performing the duties of his or her job.
An amount paid to an insurance agent based on a percentage of sales.
People such as children or spouses who rely on someone else for financial support.
A type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time.
Insurance that covers part or all of the fees imposed for dental services, including annual checkups, orthodontics, and oral surgery.
Insurance that covers injury or damage related to a vacation. This could include coverage because of bad weather, cancelled flights, illness that would cause the person not to travel, and etc.
OTHER SETS BY THIS CREATOR
Chapter 8: Accounting for Receivables (not Attig's set)
MODULE 0 -- FINANCIAL DECISION-MAKING IN CONTEXT
MODULE 3 -- EARNING