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Chap 10-9
Section 9
12
Finance
Undergraduate 4
10/25/2011

Additional Finance Flashcards

 


 

Cards

Term
eliminates small claims that are expensive to handle and process
Definition
deductibles
Term
because a deductible eliminate small claims, the insurer's loss-adjustment expenses
Definition
are reduced
Term
are used to reduce premiums paid by the insured
Definition
deductibles
Term
because deductibles eliminate small claims, premiums can be substantially
Definition
reduced
Term
is not an appropriate technique for paying small losses that can be better budgeted out of personal or business income
Definition
insurance
Term
should be used to cover large, catastrophic events, such as medical expenses of $500,000 or more from an extended terminal illness
Definition
insurance
Term
insurance that protects against what type of loss can be purchased more economically?
Definition
catastrophic
Term
the concept of using insurance premiums to pay for large losses rather than for small losses
Definition
large-loss principle
Term
objective is to cover large losses that can financially ruin an individual and exclude small losses that can be budgeted out of a person's income
Definition
large-loss principle
Term
other factors being equal, what type of deductible is preferable?
Definition
a large one is preferable to small one
Term
are used by insurers to reduce both moral hazard and attitudinal hazard
Definition
deductibles
Term
encourage people to be more careful with respect to the protection of their property and prevention of a loss b/c the insured must bear a part of the loss
Definition
deductibles
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