《金融学教学》bodie2e_chapter11.ppt

* * * * * * * * * * * Copyright ? 2009 Pearson Education, Inc. Publishing as Prentice Hall * 11.11 Diversification the Cost of Insurance When you purchase insurance, the premium, p, may be divided into two portions a, the actuary value of the good-faith risk b, the sales, administration, profits, and fraud The ratio a/p not always as high as one would like Copyright ? 2009 Pearson Education, Inc. Publishing as Prentice Hall * Self-Insurance Accordingly, accepting some of the risk yourself may be advisable in some situations When the correlation between risks is not high when the number of risks is relatively high when the risks are of the same magnitude * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Copyright ? 2009 Pearson Education, Inc. Publishing as Prentice Hall * 11.6 Basic Features of Insurance Contracts Exclusions losses that might seem to meet the conditions for coverage under the insurance contract but are specifically excluded. E.g.: life insurance policies pay benefits if the insured party dies, but such policies typically exclude payment of death benefits if the insured person takes his own life. E.g.: health insurance policies exclude from coverage certain illnesses the insured party had before the policies were purchased. Copyright ? 2009 Pearson Education, Inc. Publishing as Prentice Hall * 11.6 Basic Features of Insurance Contracts Caps Limits placed on compensation for particular losses covered under an insurance contract. Deductibles The amounts of money that the insured party must pay out of his or her own resources before receiving any compensation from the insurer. Co-payments The fraction of the loss that the insured parties must cover. Deductibles and co-payments create incentives for insured parties to control their losses. Copyright ? 2009 Pearson Education, Inc. Publishing as Prentice Hall * Deductibles vs. co-payments A health insurance policy that covers visits to the physician: With a copayment feature, the pat