Textbook Notes (368,122)
Canada (161,660)
MTHEL 131 (32)
Chapter 1

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Mathematics Electives
Dave Oakden

Economic Security and the Nature of Life and Health InsuranceMay 6 2014636 PMTypes of Life InsuranceEconomic Security and Nature of Life and Health InsuranceWhole LifeTermEndowmentSecurity is basic human desireCoverage N year termN year endowment if policyholder dies in n Groups can provide security where lone individual would face insecurity risk sharingMennonitescontinues if Coverage ceases at end of year period value of policy is paid out to Covered perils include premium are paid n years so benefit is paid beneficiary If policyholder lives for n year Deathfor whole of lifeonly if death occurs in n value of policy is paid to policyholder Fireyear periodWindDisabilityOther Life Contingent PoliciesInsurance does not stop these or change their probability but change small probability for large loss to certainty of small cost premiumLife annuities pay periodic monthly payment to policyholderannuitant starting at specified age and going for lifeCan also pay term certain annuities 10 year annuity or combinationInsurance Defined Policies based on HealthPolicyownerpolicyholderOne who pays consideration called premiumDisability income insurance policyholder disabled physical or mental and cant workSometimes other than the insured juvenile Long term care insurance if policyholder loses capacity for selfcareInsurerpays out moneydefined service if a covered event occurs in policy term Medical expense insurance less important in Canada than USBeneficiaryWhom the benefit is paid toEconomical LegalMechanism to pool riskContract btwn policyowner and insurerOther Insurance ClassificationsIndividualGroup usually sponsored by employer who may or may not pay part of costCredit insurance term insurance policy to cover a loan or mortgageSocial VS PrivateSocialPrivate Government sponsored insuranceEmphasis is on individual equity eg Each Old age pension old age securitypolicyholders premium reflect expected value of their Not funded by taxpayers but by lossthose who pay premiumsCanada pension planMedicare not 100 coverageEmployment insuranceWorkers compensationCompulsoryOptional Mandated premiumsContributionsTaxes Redistributes wealth employment insuranceLife VS NonLifefew insurance companies sell both life and nonlife Each use different legal entitiesLifeNonLife propertycasualty insuranceLife insuranceProperty home officeDisability income insuranceAutomobile damage liability no faultLife annuities retirement pensionLiability professional negligenceAccident and sickness extended healthWorkers compensationprivate in many countriesLife VS HealthLifeHealthPolicies that pay benefits on deathNormal name for accident and sickness insurance Chapter 1 Page 1
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