Purpose of insurance. Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Question

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Answer 1

Question

Chapter 10, Problem 10.1PQ1

Summary Introduction

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Expert Solution & Answer

Answer to Problem 10.1PQ1

Solution:

The main purpose of insurance is to provide financial cover against some known future risk.

Explanation of Solution

The purpose of insurance is to provide financial cover against some known future risk. The insurance provides money to the insured if future risk materialized. The future risk may be of disability, death, loss of property or anything else. Insurance helps in covering the financial damage that happens to the person. The secondary purpose is to take tax advantage because tax deduction is available for insurance, which helps an individual in saving money.

Hence, purpose of insurance is to cover risk.

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Students have asked these similar questions

The maturity value of an $35,000 non-interest-bearing, simple discount 4%, 120-day note is:

Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,905 at 10% for 4 years. Use ordinary interest as needed. Calculate the simple interest note proceeds. Calculate the simple discount note proceeds.

What you're solving for Solving for maturity value, discount period, bank discount, and proceeds of a note. What's given in the problem Face value: $55300 Rate of interest: 10% Length of note: 95 days Date of note: August 23rd Date note discounted: September 18th Bank discount rate:9 percent

Answer 2

Question

Chapter 10, Problem 10.1PQ1

Summary Introduction

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Expert Solution & Answer

Answer to Problem 10.1PQ1

Solution:

The main purpose of insurance is to provide financial cover against some known future risk.

Explanation of Solution

The purpose of insurance is to provide financial cover against some known future risk. The insurance provides money to the insured if future risk materialized. The future risk may be of disability, death, loss of property or anything else. Insurance helps in covering the financial damage that happens to the person. The secondary purpose is to take tax advantage because tax deduction is available for insurance, which helps an individual in saving money.

Hence, purpose of insurance is to cover risk.

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Answer 3

Question

Chapter 10, Problem 10.1PQ1

Summary Introduction

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Expert Solution & Answer

Answer to Problem 10.1PQ1

Solution:

The main purpose of insurance is to provide financial cover against some known future risk.

Explanation of Solution

The purpose of insurance is to provide financial cover against some known future risk. The insurance provides money to the insured if future risk materialized. The future risk may be of disability, death, loss of property or anything else. Insurance helps in covering the financial damage that happens to the person. The secondary purpose is to take tax advantage because tax deduction is available for insurance, which helps an individual in saving money.

Hence, purpose of insurance is to cover risk.

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Answer 4

Question

Chapter 10, Problem 10.1PQ1

Summary Introduction

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Expert Solution & Answer

Answer to Problem 10.1PQ1

Solution:

The main purpose of insurance is to provide financial cover against some known future risk.

Explanation of Solution

The purpose of insurance is to provide financial cover against some known future risk. The insurance provides money to the insured if future risk materialized. The future risk may be of disability, death, loss of property or anything else. Insurance helps in covering the financial damage that happens to the person. The secondary purpose is to take tax advantage because tax deduction is available for insurance, which helps an individual in saving money.

Hence, purpose of insurance is to cover risk.

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Answer 5

Chapter 10, Problem 10.1PQ1

Summary Introduction

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Expert Solution & Answer

Answer to Problem 10.1PQ1

Solution:

The main purpose of insurance is to provide financial cover against some known future risk.

Explanation of Solution

The purpose of insurance is to provide financial cover against some known future risk. The insurance provides money to the insured if future risk materialized. The future risk may be of disability, death, loss of property or anything else. Insurance helps in covering the financial damage that happens to the person. The secondary purpose is to take tax advantage because tax deduction is available for insurance, which helps an individual in saving money.

Hence, purpose of insurance is to cover risk.

Answer 6

Chapter 10, Problem 10.1PQ1

Summary Introduction

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Expert Solution & Answer

Answer to Problem 10.1PQ1

Solution:

The main purpose of insurance is to provide financial cover against some known future risk.

Explanation of Solution

The purpose of insurance is to provide financial cover against some known future risk. The insurance provides money to the insured if future risk materialized. The future risk may be of disability, death, loss of property or anything else. Insurance helps in covering the financial damage that happens to the person. The secondary purpose is to take tax advantage because tax deduction is available for insurance, which helps an individual in saving money.

Hence, purpose of insurance is to cover risk.

Answer 7

Chapter 10, Problem 10.1PQ1

Summary Introduction

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Answer 8

Expert Solution & Answer

Answer to Problem 10.1PQ1

Solution:

The main purpose of insurance is to provide financial cover against some known future risk.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The purpose of insurance is to provide financial cover against some known future risk. The insurance provides money to the insured if future risk materialized. The future risk may be of disability, death, loss of property or anything else. Insurance helps in covering the financial damage that happens to the person. The secondary purpose is to take tax advantage because tax deduction is available for insurance, which helps an individual in saving money.

Hence, purpose of insurance is to cover risk.

Answer 12

Ch. 10 - Prob. 10.1PQ1 Ch. 10 - Prob. 10.1PQ2 Ch. 10 - 3. What is the difference between pure risk and...Ch. 10 - Prob. 10.1PQ4 Ch. 10 - Prob. 10.1PQ5 Ch. 10 - Prob. 10.2PQ1 Ch. 10 - Prob. 10.2PQ2 Ch. 10 - Prob. 10.3PQ1 Ch. 10 - Prob. 10.3PQ2 Ch. 10 - Prob. 10.3PQ3

Purpose of insurance. Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Concept explainers

Videos

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Answer to Problem 10.1PQ1

Explanation of Solution

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Chapter 10 Solutions

Purpose of insurance. Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Concept explainers

Videos

To determine: Purpose of insurance. Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.

Answer to Problem 10.1PQ1

Explanation of Solution

Want to see more full solutions like this?

Chapter 10 Solutions

To determine:

Purpose of insurance.

Introduction: Insurance refers to a contract including two parties; in which one party agrees to cover all expenses in future related to specified reasons, if loss arises. Insurance provides coverage to insured in return of premium.