Insurance 101 8.1 NGPF

Front

What is the primary purpose of insurance?

Back

The primary purpose of insurance is to transfer risk from an individual or business to an insurance company.

Front

How do insurance companies determine premiums?

Back

Insurance companies use statistics to assess the likelihood of a client needing to use the insurance, which helps them set premiums to maximize profit.

Tags

CCSS.HSS.MD.B.6

CCSS.HSS.MD.B.7

Front

What is a deductible in insurance?

Back

A deductible is the amount a policyholder must pay out of pocket before the insurance company pays for covered expenses.

Front

What is the relationship between premium costs and coverage limits?

Back

Generally, higher premium costs are associated with lower deductibles and higher coverage limits.

Front

What does it mean to have loss and theft protection in insurance?

Back

Loss and theft protection covers the financial loss incurred from the theft or loss of insured items.

Front

What is the difference between a one-time fee and a monthly premium?

Back

A one-time fee is a single payment for coverage, while a monthly premium is a recurring payment made to maintain insurance coverage.

Front

What is the significance of risk assessment in insurance?

Back

Risk assessment helps insurance companies evaluate the likelihood of claims and set appropriate premiums.

Front

What is the role of statistics in the insurance industry?

Back

Statistics are used to analyze data and predict the likelihood of events, which informs premium pricing and risk management.

Tags

CCSS.HSS.MD.B.6

CCSS.HSS.MD.B.7

Front

What does it mean to transfer risk?

Back

Transferring risk means shifting the financial burden of potential losses from an individual or business to an insurance provider.

Front

What factors can influence the cost of insurance premiums?

Back

Factors include the insured's age, health, claims history, type of coverage, and the level of risk associated with the insured item.