Shared Flashcard Set

Details

Exam 4
Ch: 15,17,19 and others
16
Finance
Undergraduate 4
04/28/2009

Additional Finance Flashcards

 


 

Cards

Term
Insurable Risk
Definition
Objective
Present Characteristics
1. large common exposure to loss so that it may be predicted
2. loss must be measurable and definite
3. loss must be accidental
4. loss cant be catastrophic to society
Term
Adverse Selection
Definition
- likelihood that parties with the greatest probability of loss are the ones seeking out insurance
- insurance companies seek to avoid this
Term
Moral Hazard
Definition
- a loss from dishonest angents
Term
Morale Hazard
Definition
- a loss resulting from agents behaving recklessly, taking too much risk
Term
Contract of Indemnity
Definition
- insurance contract
- hold harmless and recovery of damages to make insured show insurable interes
Term
Personal Contract
Definition
- insurance contract
- cant be transferred w/o insurers consent
- exception life insurance
Term
contract of adhesion
Definition
- insurance contract
- the insurance co. prepares entire contract
Term
Contract of Utmost Good Faith
Definition
- insurance contract
- misstated facts/breach of contract will make it void
Term
Unilateral
Definition
- insurance contract
- only insurance co. promises to do anything
Term
Conditional Contract
Definition
- insurance contract
- valid as long as premium is paid
Term
Aleatory Contract
Definition
- insurance contract
Unequal
- nothing happens: insurer pays nothing
- loss occurs: insurer pays losses which equal more than premium
Term
MetLife & Prudential
Definition
- the largest insurance companies
- wrote 14% of total premium income
Term
Traditional Insurers
Definition
- owned by policyholders
- switched to stock ownership to raise capital & offer ESO
Term
Life Insurance: Core Business
Definition
- remove the uncertainty of income due to death/retirement from people
Term
Ordinary Life Policies
Definition
- constituted 52% of life policies in 07
- Term Life
- Whole Life
- Variable Life
- Universal Life
Term
Term Life Policy
Definition
- no saving feature
- most end with policy holder collecting nothing
Supporting users have an ad free experience!