Sven was recently quoted on a disability policy with an any occupation definition of disability. Sven does want to buy disability coverage, however, the premium was more than he was willing to pay. Sven has some savings built up as an emergency fund and manages his cash flow quite well, so he knows what premium he can afford without impacting his standard of living. What change could Sven consider that would reduce his premium but allow for coverage to continue to meet his objective? a) He could increase the elimination period of the policy b) He could increase the length of his benefit period. c) He could change the definition to own occupation. d) He could decrease the waiting period.
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- Consider a worker, Janice, who has the option to purchase DI (disability insurance) on the private market. Janice becomes disabled with probability q = 0.01. She can purchase DI by paying the premium р. If the Janice is disabled, she will earn no income. But if she is insured, she will receive a total payment of $15,000 from the insurance company (her consumption will be $15,000). If the Janice is not disabled, she earns an income of $20,000. She has utility: U = 3C3 where C is the amount of consumption. Determine the actuarially fair insurance premium, p". Write down the expected utility function for Janice if she purchases insurance at the actuarially fair price. Will Janice choose to purchase this disability insurance? Explain. What is the most she would be willing to pay for DI insurance?Chris, a good buddy or yours, is learning about personal automobile policies. He just received his policy from the insurance company. There is an item listed that he wants to take off because he doesn't think he needs it. This coverage will provide additional coverage that will pay his medical and property damage expenses above what someone else's policy pays. What policy is he referring to and does he need it? Question 6 options: Uninsured Motorist Coverage / No Uninsured Motorist Coverage / Yes Comprehensive Insurance / No Comprehensive Insurance / Yes Give typing answer with explanation and conclusionVern has a whole life policy, and he has named his wife Corinne as a revocable beneficiary. He is considering changing her status to an irrevocable beneficiary, but is unsure of the potential consequences. If Vern makes Corinne irrevocable beneficiary, what actions can he still take without Corinne's permission? i) Receive policy dividends. ii) Obtain a policy loan. iii) Assign the policy. iv) Let the policy lapse. a) i) and ii) Ob) i) an iv) c) ii) and iii) d) iii) and iv)
- Which of the following situations describes a risk exposure that can be most appropriately insured against with an individual disability income policy? A)A self-employed bookkeeper earns $40,000 a year out of a small office located in her neighborhood, and wants to protect her income. B)A lawyer wants to make sure his business overhead expenses are covered if he becomes disabled. C)A couple with a military retirement income manages a self-storage business, and they are compensated with a place to live that is on the premises of the business. D)An accountant's spouse owns the building in which the accounting office is located. All of the practice’s income is used to pay rent and other business expenses, so the accountant has no compensation from the business.A friend, explaining his position with respect to liability insurance, states, “I don’t feel I need the high limits of liability because I don’t make that much money. If I were a doctor or a lawyer, I would carry higher limits of liability coverage, but since I am not, the $100,000 minimum included in my homeowner’s policy is enough.” Do you agree or disagree? Why?A friend, explaining his position with respect to liability insurance, states, “I don’t feel I need the high limits of liability because I don’t make that much money. If I were a doctor or a lawyer, I would carry higher limits of liability coverage, but since I am not, the $100,000 minimum included in my homeowner’s policy is enough.” Is the friend's claim justifiable? Why or why not?
- You have a friend, Icahn Betitall, who just started a small business. He ispaying a hefty premium for insurance. Icahn’s insurance agent told himthat he is insuring against the risk of loss on fire, theft, liability, and businessinterruption. Icahn also has policies for life, health, and automobiles. Icahnis planning a trip to Las Vegas. He plans to contact his agent and obtain apolicy on the risk of losing his money at the blackjack table.a. What should you tell Icahn about being able to purchase such a policy?b. What are several methods that Icahn can choose to manage his risk exposurein Las Vegas?AsapTitan completes a $300,000 life insurance application form with his insurance agent Esther. Esther informs him that the insurer will request an attending physicians' statement (APS). Titan inquires about the purpose of an APS. Which of the following is Titan's CORRECT response? Select one correct answer from the list 1. An APS is needed to obtain a summary of Titan's medical history. 2 An APS is needed to obtain a summary of Titan's family medical history. 3. 4. An APS is needed to obtain more information about Titan's lifestyle. An APS is needed to find out why Titan's driver's license was suspended. 000 0
- Sue is just learning about disability insurance. Which statements are true about disability insurance? I. Disability income insurance pays a monthly benefit in the event that Sue is unable to work as a result of an injury or an illness. II. Disability insurance under regular occupation is a policy that provides benefits if Sue is unable to perform the duties required by her regular occupation. III. Disability insurance under "any occupation" is a policy that provides benefits only if Sue cannot perform the duties of any job that fits her education and experience. IV. Indemnification is the insurance concept of putting Sue back into the same position that she was in prior to the injury or illness. A I, III, and IV II , III, and IV C All responses D I and II E I, Il and IIIJohn is frustrated in his inability to sell his house for the amount he wants. What should Anita do to educate John? Will this education process help Anita obtain the listing? How?Sarah wants to start his own sports clothing shop. She doesn’t know if she should set up a company or sole trader. Discuss with Sarah the considerations of each option. (Tax)