Basic Insurance

Front

INSURANCE

Back

Contract that transfers risk of financial loss from individual/business to insurer

Front

RISK

Back

Uncertainty about whether a loss will occur

Front

SPECULATIVE RISK

Back

Possibility of loss or gain (gambling)

Front

PURE RISK

Back

Only possibility of a loss (can be covered by insurance)

Front

EXPOSURE

Back

risk assumed by insurer and amount insurer is responsible to pay out-expressed in units ($32 for $1000 death benefit-premium for 100,000-32x100=$3200)

Front

PERIL

Back

Cause of loss

Front

HAZARD

Back

Anything that increases chance of loss (make loss more likely-doesn't cause loss)

Front

PHYSICAL HAZARD

Back

physically identifiable

Front

MORAL HAZARD

Back

Arises from character (dishonesty)

Front

MORALE HAZARD

Back

State of mind (careless, unconscious decision)