RISK MANAGEMENT AND INSURANCE

Risk Management and Insurance



Risk Management and Insurance

Policyholders Surplus is = 900-640 = 340

505 million in earned premiums last year means that the amount is now belong to insurer when the insured has not made any claims. This is basically charged in the basis of pro rata and is of previously written premiums.

Rock Solid is charged with income taxes because the company has recorded profits on investment income.

Pure Premium = 10,000,000/50,000 = 1000

Gross Premium = 300/1-0.4 = 500

Only Mike will pay $100,000 because he has primary insurance policy.

Mike will pay $250,000 and the excess will be paid by Donna which is $50,000.

Donna will be paying the amount o $100,000.

Ordinary life insurance will be suffice to cover the needs of the Sharon if she dies prematurely because it has low premiums and covers the dependents in case of death.

Universal Life insurance policy is excellent because it can be converted later into Cash value which can be used for college fund.

Universal life insurance is best for making a down payment because the insurance amount can be converted into cash value.

The major obstacle which will be faced by the Sharon is that the amount will be tied to the contract and can only be paid at the end of the term which is pre decided by the insurance company.

The convertible feature of the term insurance policy will be able to help Sharon to accumulate fund for retirement.

Flexible Premium annuities are best for age 35 because James will have to option to change the payment plan.

Life Annuity with guaranteed payments annuity settlement option will cover Nancy.

Life Annuity settlement option will provide the Jennifer with the required needs because it will give maximum periodic payments and will not pay after the death.

Inflation indexed annuity option will provide benefit against the inflation.

Immediate annuity will provide the Mary with the required needs because it will give maximum periodic payments as she is retired and not working.

Equity Indexed Annuity will help Kathy because they are for risk averse investors and provide protection and also guarantee a minimum return as well as normal return.

Yes Scott is eligible because her wife is earning and fully covered by the School Districts Retirement Plan.

Yes Allison is eligible because she is covered by the school's District Retirement plan.

Yes they both can establish Roth IRA because there MAGI fall below $173,000.

Yes Allison can establish traditional IRA because his spouse is fully covered and MAGI is less than $173,000.

In the Roth IRA the contributions are not tax deductible, there is no age limit, All earnings are Tax free if rules are followed and there is no age limit for the withdrawals and there are no penalties on early withdrawals.

Yes the insurer is obliged to pay the disability benefits after the 90 day elimination period.

Yes Insurance Company will be liable to pay the disability benefits because she also has residual disability benefits and she has lost 800 in income which ...