UA CSM 204 - Final Exam Study Guide (18 pages)

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Final Exam Study Guide



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Final Exam Study Guide

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Exam #4 Study Guide-Study Guide for Chapters 10-12 &18-19


Pages:
18
Type:
Study Guide
School:
University of Alabama
Course:
Csm 204 - Intro Personl Finan Plan
Edition:
1

Unformatted text preview:

CSM 204 Exam 4 Study Guide Chapters 10 12 and 18 19 CSM 204 Exam 4 Review Sheet Definitions types and examples of risk peril and hazard Insurance Protection against possible financial loss Insurer The insurance company Insured The person or thing the insurance is protecting Premium The amount of money you pay for insurance Policy A written contact for insurance Risk Chance or uncertainty of loss Types of Risk Speculative risk Chance of either loss or gain Uninsurable Pure Risk Chance of only loss if the specified events occur Accidental or unintentional Can be predictable in nature Peril What you are insuring against The bad thing that can happen Example Car Insurance Accidents Vandalism Example Home Insurance Fire Burglary Example Health Insurance Disease Injuries Example Life Insurance Death Hazard A factor that increases the likelihood of loss through some peril Risk management methods Risk Avoidance Totally avoiding doing certain hazardous actions Example Avoiding death by plane crash You decide never to fly in planes therefore you could never die or sustain injuries by being in a plane that crashed Risk Reduction Getting partially rid of certain hazards by reducing the risk Keeps insurance costs lower Example Car Insurance Having a navigator in your car Wearing a seat belt Abiding by the speed limit Example Home Insurance Having fire extinguishers Having dead bolts Having fire alarms Example Health Insurance Exercising regularly Getting regular health check ups Not participating in activities with higher injury rates Risk Assumption Making the conscious decision to assume the risk Risk can be assumed by accident such as when someone fails to buy insurance by simply forgetting to purchase it Self insurance The process of establishing a monetary fund to cover the cost of a loss as opposed to purchasing insurance Risk Shifting Shifting the burden of the consequences associate with perils off of us on onto other people by purchasing insurance Liability negligence



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