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What Insurance Does for the Farmers It substitutes certainty for uncertainty. Everybody is exposed to risks such as death, accident, etc. Likewise, proper- ties like buildings, machines, equipment and the like are sub- ject to damage. Nobody knows when he will die or when his properties will be destroyed. If an individual assumes such uncertain risks all by himself, his chances are quite slim. He is gimbling his chances. However, in the case ofinsurance, his uncertainties are greatiy reduced or even eliminated. Through insurance, he substitutes a sall but certain payment for a big and possibly a heavy loss. If the toss falls on him, he would be paid for the loss. dedistribule the cost-of losses People organize them- selves into a group and agree to contribute to a common fund. This fund bears the losses of the individual members. This is the principle of insurance. When a member suffers from a loss, all the other members contribute r small but certain amount

What Insurance Does for the Farmers It substitutes certainty for uncertainty. Everybody is exposed to risks such as death, accident, etc. Likewise, proper- ties like buildings, machines, equipment and the like are sub- ject to damage. Nobody knows when he will die or when his properties will be destroyed. If an individual assumes such uncertain risks all by himself, his chances are quite slim. He is gimbling his chances. However, in the case ofinsurance, his uncertainties are greatiy reduced or even eliminated. Through insurance, he substitutes a sall but certain payment for a big and possibly a heavy loss. If the toss falls on him, he would be paid for the loss. dedistribule the cost-of losses People organize them- selves into a group and agree to contribute to a common fund. This fund bears the losses of the individual members. This is the principle of insurance. When a member suffers from a loss, all the other members contribute r small but certain amount

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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AGRICULTURAL INSURANCE 93 to help the victim. This payment is called the premium. The calculation of the premium is illustrated by the simplest of insurance contracta which is the Farmers Mutual Fire Insur- ance Association. This group operates by assessment, that is, the rmembers agree to pay the loss of the fire victim. The los is determined and divided among the mermbers, each pays his con- tribution. Nevertheless, there are other waya of calculating the premiums. It helps in getting eredit. Banks grant loans to farmers on the basts of their ability to pay, Such ability is supported by securities like land and other valuable property. As a protec- tion, the benks require the property of the borrower to be insured. This insurance can replace the property in case of destruction. It kelps in the ealculation of costs. Loss or damage of property or materials are part of the cost of production. If these are insured, a farmer includes his premium payments as cost or expenditure. Without insurance, he cannot properly calculate his possible loss. It could be P1 million or none at all.
Transcribed Image Text:AGRICULTURAL INSURANCE 93 to help the victim. This payment is called the premium. The calculation of the premium is illustrated by the simplest of insurance contracta which is the Farmers Mutual Fire Insur- ance Association. This group operates by assessment, that is, the rmembers agree to pay the loss of the fire victim. The los is determined and divided among the mermbers, each pays his con- tribution. Nevertheless, there are other waya of calculating the premiums. It helps in getting eredit. Banks grant loans to farmers on the basts of their ability to pay, Such ability is supported by securities like land and other valuable property. As a protec- tion, the benks require the property of the borrower to be insured. This insurance can replace the property in case of destruction. It kelps in the ealculation of costs. Loss or damage of property or materials are part of the cost of production. If these are insured, a farmer includes his premium payments as cost or expenditure. Without insurance, he cannot properly calculate his possible loss. It could be P1 million or none at all.
What Insurance Does for the Farmers It substitutes certainty for uncertainty. Everybody is exposed to risks such as death, accident, etc. Likewise, proper- ties like buildings, machines, equipment and the ike are sub- ject to damage. Nobody knows when he will die or when his properties will be destroyed. If an individual assumes such uncertain risks all by himself, his chances are quite slim. He is gàmbling his chances. However, in the case of insurance, his uncertainties are greatiy reduced or even eliminated. Through insurance, he substitutes a snall but certain payment for a big and possibly a heavy loss. If the loss falls on him, he would be paid for the loss. edistribules the cost-of losses. People organize them- selves into a group and agree to contribute to a common fund. This fund bears the losses of the individual members. This is the principle of insurance. When a member sufers from a loss, all the other members contribute e small but certain amount
Transcribed Image Text:What Insurance Does for the Farmers It substitutes certainty for uncertainty. Everybody is exposed to risks such as death, accident, etc. Likewise, proper- ties like buildings, machines, equipment and the ike are sub- ject to damage. Nobody knows when he will die or when his properties will be destroyed. If an individual assumes such uncertain risks all by himself, his chances are quite slim. He is gàmbling his chances. However, in the case of insurance, his uncertainties are greatiy reduced or even eliminated. Through insurance, he substitutes a snall but certain payment for a big and possibly a heavy loss. If the loss falls on him, he would be paid for the loss. edistribules the cost-of losses. People organize them- selves into a group and agree to contribute to a common fund. This fund bears the losses of the individual members. This is the principle of insurance. When a member sufers from a loss, all the other members contribute e small but certain amount
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