Intro to Insurance

The purpose of insurance is to…

• build wealth

• transfer risk

• manage assets

• build relationships

Why is it important for insurance companies to have a large risk pool of people paying premiums?

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  If a large pool of people pay premiums, insurance company employees will get more bonuses included in their next paycheck

• The premium payments of all the insured clients will cover the costs for the emergencies of the few who need it

• The more people that pay premiums, the less likely each insured client will experience an emergency

• A large pool of people paying premiums yields insurance companies to have a larger social media following

What role does math play in the insurance industry? 

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  Insurance companies use statistics to find how likely a client will need to use the insurance so they can set premiums in order to have the highest chance of making a profit

• Insurance companies use algebra and geometry to calculate the distance from clients' major emergencies to nearest hospitals

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  Insurance companies use statistics to hypothesize how likely clients are to switch over to competitive companies

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  Insurance companies use calculus to find out how likely a client will need to use the insurance so they can set premiums in order to have the highest chance of making a profit

The amount of money you're charged for your insurance policy.

If you file an insurance claim for a covered loss, your deductible is the amount you'll pay out of pocket before your insurance benefits kicks in.

A coverage_____ is the maximum amount your insurance policy will reimburse you for a covered loss.

Which of the following determine your Life Insurance Premium?

• Where you live

• Hobbies

• Credit Score/History

• Driving Record

Which of the following determine your renters insurance premium?

• Deductible

• Dog Breed

• Plan Category

• Gender

Which of the following determine your health insurance premium?

• Plan Category(Gold, Silver, bronze, platinum)

• Family Health History

• Health history

• Gender