Insurance Intro

Good Afternoon! The 3 1/2 minute video introduces an overview of how insurance works. Please watch and answer the questions below. Then scroll to the second assignment. You can send your answers by email, remind, or pictures. Please have complete by Friday, May 22. Let me know if you need anything.

1. The purpose of insurance is to…
   1. build wealth
   2. transfer risk
   3. manage assets
   4. build relationships
2. The best definition of insurance premium is
   1. A luxury item
   2. What you receive in compensation
   3. The total cost of your insurance policy
   4. The monthly payment for your insurance policy
3. Why is it important for insurance companies to have a large pool of people paying premiums?
   1. If a large pool of people pay premiums, insurance company employees will get more bonuses included in their next paycheck.
   2. The premium payments of all the insured clients will cover the costs for the emergencies of the few who need it.
   3. The more people that pay premiums, the less likely each insured client will experience an emergency.
   4. A large pool of people paying premiums yields insurance companies to have a larger social media following.
4. What role does math play in the insurance industry?
   1. Insurance companies use statistics to find how likely a client will need to use the insurance so they can set premiums in order to have the highest chance of making a profit.
   2. Insurance companies use algebra and geometry to calculate the distance from clients' major emergencies to nearest hospitals.
   3. Insurance companies use statistics to hypothesize how likely clients are to switch over to competitive companies.
   4. Insurance companies use calculus to find out how likely a client will need to use the insurance so they can set premiums in order to have the highest chance of making a profit.