1

knowledge

Quantify the probability of a particular thing. The probability is often presented as a ratio of the times that it happens to the times that it may happen.

application

Probability is used to describe the possibility that a bad thing may bring risks to people.

2

knowledge

Individuals have different willingness to take risks. Most people would rather pay a few costs now to avoid higher risks in the future.

application

Discuss on whether it is a waste to insure an event that will never happen.

3

knowledge

People make wrong judgements about risk accidents because they often overestimate the probability of rare accidents due to something they see or hear recently.

application

Discuss why the extended warranty of consumer goods act as insurance. Estimate the costs of the extended warranty of three consumer goods: a new car, a smartphone and a dishwasher. Take into consideration the probability of their breakdown, the costs of replacing parts of them and the prices of warranty.

4

knowledge

People choose the insurance coverage according to their willingness to take risks, occupations, lifestyles, financial condition and the insurance prices.

application

Build up profiles of three kinds of people. They are different in occupation, age, lifestyle, marital status and financial condition. Assess the type and level of risks each of them faces and give them proper advice on insurance.

5

knowledge

People may be asked to buy certain types of insurance by the government or certain types of contracts such as a home mortgage loan.

application

Explain why lenders need to buy home insurance when householders make a secured loan. Investigate regulations about how many car insurances are needed when buying a car.

6

knowledge

Insurance policies will increase the probability of potential risks and the loss because people holding insurance are likely to take higher risks. Policies such as deductibles and co-payments are characterized by cost sharing, so the policyholders will take measures to reduce the potential loss (compensation).

application

Suppose here is an accident, calculate the insured amount after consider the excluded liabilities and deductibles. Explain why the car owners who have lower deductibles pay less attention to lock their cars.

7

knowledge

People can reduce insurance premiums by showing they are at low risk.

application

Explain why people who have taken a course on driving safety can reduce the car insurance premium. Explain why people who don’t smoke have a lower health insurance premium.

8

knowledge

Health insurance provides fund for medical care and the prevention of diseases. Large medical insurance companies often negotiate with doctors, hospitals and other health care providers, in an effort to offer their policyholders a lower medical price.

application

Suppose someone’s going to take a medical treatment, work out a plan on it and compare the coverage and costs of this plan. Use the sample of a policyholder interest statement to determine the possible discounts in the treatment and the medical costs without insurance.

9

knowledge

Disability insurance belongs to income protection insurance. It provides funds as a replacement of income when a person suffers diseases, injuries and disability to work.

application

Estimate a person’s level of financial risks based on a person’s potential disability and determine whether a disability insurance is suitable for him or her.

10

knowledge

Property insurance and accident insurance including the renters’ insurance provide compensation for the harm or loss in the insured properties.

application

Contact insurance companies and learn the prices of insurance for cars of different manufacturers and years of use. Explain the differences of their insurance policies in coverage and kind.