This website uses cookies to ensure you have the best experience. Learn more

Insurance Models Essay

2676 words - 11 pages

The purpose for this paper is to discuss the importance of transferring risk of one’s assets regarding personal assets through the use of the many insurance models available in today’s market. There will be a discussion of what insurance is and what it represents to those insured. Following will be an explanation of the various insurance models available including whole life, term life, variable life, universal life, and index life programs. All of which are good viable options depending on the needs of potential insurance clients. Also included in the explanation will be the advantages and disadvantages of each insurance option. Finally, there will be a brief summary of the various insurance options and their final outcomes in protecting the policy holder’s family and their future.

Insurance Models
In the world of corporate and personal finance everyone is always concerned about risk with one’s cash assets or non-liquid assets known as hard assets. Everyone wants to protect the profits while all the while reducing their risk. Here in BA 312 Business Finance we have learned of many ways in which to maximize company profits while minimizing the risks associated with the day-to-day financial decisions. In personal finance one has to guard against risk as well. After all that has been done both corporately and personally to minimize financial risk, there is still another area where one can transfer their risk in order to protect what took years to build. Most do not consider the option of transferring their risk to someone else or some other company, but risk can be transferred through a vehicle called insurance. Insurance has its costs, but those costs pale in comparison to the costs associated with the possibility of a complete loss of one’s assets. Insurance is usually considered as an afterthought, putting off until a more convenient time presents itself which seems to never come until it is too late. As part of financial planning, applying insurance coverage is one of the better investments to protect a person’s assets for their family’s future. There are many financial institutions that provide financial services such as insurance companies with various products to choose from (Ross, Westerfield, & Jordan, 2011). There are products such as whole life, term life, variable life, universal life, and index life programs available. Depending on the client’s needs there are many things to consider when choosing the various programs based on their advantages and disadvantages.
The term insurance is a method of financial protection paid in a monthly or annual premium in the event damage, total loss of one’s assets, or death covered under the insurance contract between the insurer and the insured. Claims Information Specialists (2010) defines insurance as “a special type of contract between an insurance company and its client in which the insurance company agrees that on the happening of certain events the insurance company will...

Find Another Essay On Insurance Models

The Structuring of Early Computer Use in Life Insurance

852 words - 4 pages ultimately decided to stay with existing insurance processes as models for computer use, while the second group consisted of medium-sized firms that changed their insurance processes over to computers out of a sense that they needed a change. With the employee consider about the invention of the computer entering the work place specifically insurance companies it was communicated clearly that the computer would not result in layoffs (Yates 1999, 14

Insurance sector in india Essay

4943 words - 20 pages and invest large amounts of premium. Insurance products are multi purpose and offer the following benefits :1. Protection to the investors2. Accumulate savings3. Channelise savings into sectors needing huge long term investments.ICs receive, without much default, a steady cash stream of premium or contributions to pension plans. Various actuary studies and models enable them to predict, relatively accurately, their expected cash outflows

Solving the Foreclosure Crisis

1193 words - 5 pages payments of individuals in order to mitigate the possibility of a cataclysmic loss of an individual or lender. There are many benefits to insuring mortgages. At a relatively low cost to the borrower, we can create a new profit-generating insurance industry which would protect lenders and mortgage holders. Although mortgage holders’ credit scores and associated costs are at risk, they do not have to worry about losing their home to repossession

Natural and Man Made Disasters

2100 words - 8 pages having insurance against such risk of losses banks were finding it a problem to issue loans and mortgages because they are exposed to the risk. To explain why there are only a small proportion of people insured (using the US as an example); the first step is to understand the insurance models, then to consider the behaviors of the demand side and supply side. To understand why people who are at risk and not insured against it, it is important

Bancassurance in India

4286 words - 17 pages different, both in make up, culture, geographic spread and working practices. There are a wide number of approaches and models that can be adapted for bancassurance, many of which are dependent on these attributes, as well as the insurance partner views and competencies, and also the nature of the relationship between the bank and insurer - whether one of equity sharing company structure, or of a profit share nature or purely a distribution

Business Intelligence And Insurance

4192 words - 17 pages premium amount. Actuaries need to decide the right amount of reinsurance in order to maximize the returns for the risk acceptable to the insurance company. Data-Mining tools can develop predictive models to arrive at the reinsurance level for a book of business based on the historical claims data residing in the data warehouse. These predictive models can identify suitable policies for reinsurance based on the loss experience of similar policies in

Impact of ACA

2184 words - 9 pages Affordable Care Act's Impact On The Health Care Industry If you've lived in the United States, there is no way the topic of Affordable Care Act(ACA) could be evaded. Its on the news, its on the streets, its everywhere! For the general public the ACA stands for complete health coverage and cheaper insurance premiums. For the healthcare Industry however, whether Hospitals, Health care delivery models, Insurance Companies, Pharmaceutical and

ACTUARIES AND THE AUDITING PROCESS

928 words - 4 pages ACTUARIES AND THE AUDITING PROCESS Risk is an inevitable element of any type of business with the insurance sector being no exception. Insurance companies accept various forms of risk – each which can affect the ability of a company to meet its future liabilities. These risks need to be identified, analysed, and managed/mitigated as far as possible. These procedures and controls will form part of a company’s risk management framework (Chen

TRIA Renewal

1917 words - 8 pages Services Roundtable states: "Terrorism is an unpredictable risk by nature, and cannot be underwritten for insurance purposes as no credible models exist for terrorism risk when compared to other insurable disasters". A private-public partnership via TRIA creates the support needed for viable policies, while preventing the public from footing the bill after an incident. TRIA ensures a robust private terrorism risk insurance market that can provide

Industry Project Report on the Australian Private Health Fund Industry

3248 words - 13 pages , mainly around factors which affect and drive business decisions. Both the models identify that competition, be it internal rivalry, substitutes or pricing are the key drivers of the industry. And along with the ease of entry of competitors and buyer power, it moulds the conduct of the entire industry.Analysis of Australian Private Health Fund IndustryThere are currently 48 registered health insurance organisation, and 30 of these are potentially

TITLE: Planning for Your Retirement: What Most Investment Advisers Do Not Tell You

989 words - 4 pages and executing various sustainable lifetime income planning solutions like deferred fixed-income and single-premium immediate annuities. In contrast to the AUM model, Non-AUM compensation models are mainly based on commission. Annuity commissions are paid by life insurance companies; life insurance agents generally receive a certain amount of money as a percentage of premiums received. This is contrary to the AUM model in which the investment

Similar Essays

Risk In Insurance Essay

1303 words - 6 pages “Insurance tends to increase demand and make patients less price sensitive, which increases prices overall.” Insurance The basic concept of insurance is the transfer of risk from one entity to another through certain conditions. Health insurance is no different, only the entities mentioned are consumer or the patient and the insurance company. In the health insurance concept, a premium is paid by the individual to the company for a year

Why Are More People Who Are At Risk Of Suffering Losses From Disasters (Both Natural And Man Made) Not Insured Against Them, And What Policies Might Increase The Prevalence Of Insurance Against...

1956 words - 8 pages these exemplary behaviors, it is imperative to understand the benchmark models of insurance. The benchmark models of demand and supply play an almost equal role in determining what decisions the buyer and seller of the insurance make. These decisions heavily depend on the behavioral patterns in the real world and this is where the behavioral economics is intertwined with classical economics.Benchmark model of DemandThe benchmark model of demand (for

Why Are More People Who Are At Risk Of Suffering Losses From Disasters (Both Natural And Man Made) Not Insured Against Them, And What Policies Might Increase The Prevalence Of Insurance Against...

1956 words - 8 pages these exemplary behaviors, it is imperative to understand the benchmark models of insurance. The benchmark models of demand and supply play an almost equal role in determining what decisions the buyer and seller of the insurance make. These decisions heavily depend on the behavioral patterns in the real world and this is where the behavioral economics is intertwined with classical economics.Benchmark model of DemandThe benchmark model of demand (for

Moral Hazard Essay

9362 words - 37 pages Current State of Health Insurance in the U.S.4.4 A Comparison to Other Industrialized Countries5. Models of Health Insurance 195.1 Social Health Insurance5.2 Actuarial Health Insurance6. The Conventional Moral Hazard Critique 226.1 The Critique6.2 Policy Solution6.2.1 Deductibles6.2.2 Coinsurance6.2.3 Co-payments6.2.4 Terms and Limits6.2.5 Preexisting Conditions6.2.6 Health Savings Accounts7. The Challenge 277.1 RAND Corporation Study7.2 The