Barney Farnsworth is unable to afford the proposed insurance premium to insure his hobby shop. Instead of purchasing insurance, Barney decides to set aside a specific amount of money to use in the event that property loss occurs. What do we call this type of risk management technique?
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Barney Farnsworth is unable to afford the proposed insurance premium to insure his hobby shop. Instead of purchasing insurance, Barney decides to set aside a specific amount of money to use in the event that property loss occurs. What do we call this type of risk management technique?
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- Why do you think a speeding ticket or DUI would increase your insurance rate?Insurance planning is important to protect a person from an unforeseen event like premature death, disability, illness, property loss, liability or unemployment. However, conventional insurance is prohibited in the Shariah because _____ a. It involves conventional investment planner. b. It is against the faith of destiny (qada wa qadar) that everything is decided by Allah the almighty c. It involves uncertainty (gharar) in the transactionA life insurance company worries that people with low risk of dying will not buy insurance because the premium is too high relative to their risk. What problem does this refer to? adverse selection moral hazard O free rider O negative externality
- 6. Explain how moral hazard could lead people to under-save if social security were replaced by voluntary personal accounts.How would a renters insurance policy help protect your property? What do such policies cover? How much would it cost you to insure against the look loss of just your laptop or desktop computer?What are some of the possible consequences should a home owner allow the policy to lapse?
- At one time, it was felt that liability insurance would undermine the tort system, which has as its central theorem the concept that the individual responsible for injuring another should be made to pay for that injury. Do you think the existence of liability insurance causes one to be less careful than he or she might otherwise be?Suppose health-care reform Y makes it unlawful for insurance companies to deny insurance to persons with a preexisting disease and sets a fine for those people who do not buy insurance. It follows that if the fine is a. larger than the benefits derived from not buying insurance right away, then people will not buy the insurance and pay the fine. b. smaller than the benefits derived from not buying the insurance right away, then people will not buy the insurance and pay the fine. c. There is not enough information provided to answer this question. d. larger than the benefits derived from not buying insurance right away, then people will buy the insurance right away and not pay the fine.Which of the followings is NOT correct about life insurance? a. To meet an insured person's debts and other financial commitments in the event of death. b. To pay for urgent medical expenses to save the life of an insured person if that is needed. c. To provide a financial benefit to dependents upon premature death of an insured person. d. To provide a sum of money if an insured person got a fire in his factory.
- Which of the followings is NOT correct about life insurance? O a. To meet an insured person's debts and other financial commitments in the event of death. O b. To provide a financial benefit to dependents upon premature death of an insured person. O C. To provide a sum of money if an insured person got a fire in his factory. O d. To pay for urgent medical expenses to save the life of an insured person if that is needed.A friend tells you about a plan for the formation of an insurance company that will issue insurance policies to protect a person who buys stock against a decline in the value of that stock. Explain why you believe the scheme will or will not work.There are some risks that you can transfer to an insurance company. There are also risks that you may want to retain. We all know the common risks that are transferred to insurance companies: auto, home, health, life. Detail a risk that could be transferred to an insurance company, but isn’t utilized as often as the most common ones mentioned. Explain the risk that can be transferred, when it’s used, and why it isn’t.