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CHAPTER 5 : RISK MANAGEMENT AND LIFE INSURANCE - Coggle Diagram
CHAPTER 5 : RISK MANAGEMENT AND LIFE INSURANCE
1.INTRODUCTION
Protection against financial loss
Risk-sharing firm (insurer)
Premiums paid by policyholder
2.TYPES OF RISKS
Personal Risks
(illness, disability, death)
Property Risks
(fire, theft, accidents)
Liability Risks
(legal claims, lawsuits)
Pure Risk
: only loss, insurable
Speculative Risk
: loss or gain, uninsurable
3.RISK MANAGEMENT METHODS
Avoidance (not engaging in risky activities)
Reduction (seat belts, alarms, exercise)
Assumption (self-insurance, savings)
Shifting (insurance transfer, deductibles)
4.INSURANCE PRINCIPAL
Insurable Interest
Utmost Good Faith
Indemnity
Contribution
Subrogation
Proximate Cause
6. LIFE INSURANCE
Approaches
:
Family Maintenance Fund
Multiple Salary Approach
Needs Approach
Types
Term Insurance
Whole Life Insurance
Endowment Plan
Annuity/Pension Plans
7. GENERAL INSURANCE
Medical & Health Insurance
(Hospitalization, surgery, critical illness, disability)
Personal Accident Insurance
Property Insurance
(Fire, House Owner, Householder policies)
Motor Insurance
(Act, Third-Party, Fire & Theft, Comprehensive
Travel Insurance
8.TAKAFUL (ISLAMIC INSURANCE)
Based on mutual cooperation & Shariah law
No Riba (interest), Gharar (uncertainty), Maysir (gambling)
Risk sharing among participants
Vs. Conventional Insurance (risk transfer, interest, gambling, uncertainty)
9.TIPS BUYING INSURANCE
Buy from authorized agent/company
Shop around for best rates
Understand coverage, terms, conditions
Avoid unnecessary add-ons
Ensure suitability for your needs
5.INSURANCE PLANNING PROCESS
Set insurance goals
Develop a plan
Implement the plan
Evaluate periodically