Understanding Insurance

The video explains the concept of insurance, highlighting its necessity in preventing financial burdens from unforeseen events. It covers how insurance works, the types of insurance available, and the difference between saving money and buying insurance. The video also discusses unusual insurance policies, reinsurance, and the process of handling claims. It concludes by emphasizing the benefits of insurance for both consumers and companies.

What is the primary purpose of insurance?

• To increase personal savings

• To reduce monthly expenses

• To prevent financial loss from unforeseen events

• To provide investment opportunities

In the context of insurance, who is the 'insured'?

• The government regulating insurance policies

• The bank holding the insurance funds

• The person or entity receiving protection against risk

• The person or entity providing the insurance

How do insurance companies determine the amount to charge for premiums?

• By guessing the potential risk

• By matching competitors' prices

• By following government guidelines

• By using complex models to calculate risk and profit

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CCSS.RI.6.1

CCSS.RI.7.8

CCSS.RI.8.8

CCSS.RL.6.1

CCSS.RL.8.1

Why might someone choose insurance over saving money independently?

• Insurance provides a guaranteed return on investment

• Insurance transfers risk to a larger company

• Insurance is cheaper than saving

• Saving money is always risk-free

What is reinsurance?

• A government-backed insurance program

• A type of insurance for rare events

• Insurance for insurance companies

• Insurance for individuals with multiple policies

Why is reinsurance important for insurance companies?

• It increases their profit margins

• It protects them from large-scale losses

• It allows them to offer more types of insurance

• It helps them avoid paying taxes

What is the role of investigators in the insurance claims process?

• To approve all claims automatically

• To ensure claims are legitimate and prevent fraud

• To negotiate lower payouts

• To collect premiums from policyholders

What is insurance fraud?

• Switching insurance providers frequently

• Intentionally causing damage to claim insurance money

• Paying premiums late

• Not having insurance at all

How do insurance companies benefit from having good investigators?

• They can increase their premiums

• They can expand into new markets

• They can prevent fraudulent claims and save money

• They can reduce the number of policies they offer

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CCSS.RI.6.8

CCSS.RI.7.8

CCSS.RI.8.1

CCSS.RL.8.1

CCSS.RL.9-10.1

What is a potential consequence of faking an insurance claim?

• Facing legal action and possible jail time

• Being offered more insurance options

• Receiving a higher payout

• Getting a discount on future premiums

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CCSS.RI.6.1

CCSS.RI.6.8

CCSS.RI.7.1

CCSS.RI.8.8

CCSS.RL.6.1