1 / 8

Understanding Insurance: Basics, Terminology, and Its Importance

This course provides an introduction to insurance and its significance in risk management. We explore various types of insurance, including auto, medical, liability, disability, and life insurance, along with essential terminology like insured, insurer, loss, and premium. Learn how insurance protects individuals and entities against significant potential losses, ensuring financial stability during hardships. Understand why it is crucial to cover major risks rather than minor losses, and how life insurance can secure your family's financial future in your absence.

dooley
Télécharger la présentation

Understanding Insurance: Basics, Terminology, and Its Importance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. INSU 330 Introduction to Insurance

  2. What dose Insurance Mean ?? • We all buy different types of insurance such as auto, medical, liability , disability or life insurance BUT manyof us don’t understand what it is and how it works. • In this course we will review the basics of insurance and how it works, then take you through the main types of insurance out there .

  3. Insurance is a form of risk management in which the insuredtransfers the cost of potentiallossto the insurer in exchange for monetary compensation known as premium. • What do these terms mean ? • Insured • Insurer • Loss • Premium

  4. Insurance Terminology Insured : A person who is insured by an insurance policy. Insurer : A person or company that accepts the risk of loss and compensates the insured in the event of loss in exchange for a premium. Loss: Damage or destruction to something of value. Premium: The cost of insurance which is paid monthly or yearly by the insured.

  5. The Potential Losses must be “Significant” The insurance allows individuals, businesses and other entities to protect themselves against “significant potential losses” and financial hardship , because if the potential loss is small , then it dose not make sense to pay a premium to protect against the loss. • Example 1: You would not pay a monthly premium to protect against a $50 loss, because it would not be considered a financial hardship for most.

  6. Example 2: If you are the primary breadwinner in your home,theloss of income that your family would experience because of your premature death is considered as a significant loss and hardship . If you die it is a significant loss and financial hardship for your family to replace your income BUT If you buy a life insurancefor yourself , the insurance company will replace your income in exchange for the monthly premiums you pay.

  7. “If I die why do I need money ?” you don’t … but your family, your business or your favorite charity might need.

More Related