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SS2: COMMERCE - 2ND TERM

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  1. Marine Insurance | Week 1
    3 Topics
  2. Non-insurable Risks | Week 2
    4 Topics
  3. Banking - Central Bank of Nigeria | Week 3
    3 Topics
    |
    2 Quizzes
  4. Types of Account | Week 4
    4 Topics
    |
    2 Quizzes
  5. Warehousing | Week 5
    1 Topic
    |
    1 Quiz
  6. Capital | Week 6
    2 Topics
    |
    1 Quiz
  7. Credit | Week 7
    3 Topics
    |
    3 Quizzes
  8. Profit | Week 8
    2 Topics
  9. Turnover | Week 9
    3 Topics
    |
    2 Quizzes
  10. Business Law | Week 10
    8 Topics



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Lesson 2, Topic 4
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Terms frequently used in the Insurance Industry

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1. Actuary: This is a person involved in life assurance, assessing the risks, and calculating the premium, and handling matters connected with pension funds.

2. Proposal Form:  This is a form that must be completed by a person wishing to enter into an Insurance contract. He must disclose all relevant information truthfully in the form.

3. Cover Note: This is a temporary Insurance cover to enable the insured to enjoy the benefits of a policy while it is being processed.

4. Premium: This is the payment made to an insurance company for an insurance policy. It can be paid annually, weekly or monthly, depending on the agreement.

5. Surrender Value: This is the amount in cash an assurance company will repay to an endowment policyholder if he wishes to discontinue prior to the date of maturity. It depends on the premium paid.

6. Insurer: This is the insurance company that undertakes to indemnify another against a specified loss insured against.

7. Insured: This is the person who has insurable interest in the subject matter of the policy. He pays premium to the insurer.

8. Jettison: This occurs when a shipmaster, for the interest of the parties, deliberately and reasonably throws overboard some of the cargoes in order to lighten the ship.

9. Brown Card: This is a kind of insurance card in which a motorist wishing to visit a country is expected to carry with him to cover third party liability.

10. Barratry: This refers to any act committed by the captain of a ship that is contrary to the interest of the ship owners.

Evaluation Questions

  1. What is non-insurable risk?
  2. State two features of non-insurable risks
  3. Mention three types of risks
  4. Give six examples of non-insurable risks
  5. Why are the above risks not to be insured?
  6. Discuss the importance of insurance in the world of business.
  7. Explain the following terms in insurance
    (a) Surrender value
    (b) Cover Note
    (c) Policy
    (d) Re-insurance Group insurance (WASSCE June, 2005)
    View Answer

Responses

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Question 7

Explain the following terms in insurance
(a) Surrender value
(b) Cover Note
(c) Policy
(d) Re-insurance

Solution

  1. Surrender Value: This is the amount the insurer (insurance company) will pay the assured if the assured is not interested in continuing the life assurance policy.
  2. Cover Note: This is a document issued by the insurer temporarily as an-evidence that an object has been insured pending the time to issue the insurance certificate.
  3. Policy: This is an agreement between the insurer and the insured indicating class of insurance undertaken and the item or object insured
  4. Re-insurance: This is a practice in which an insurance company undertakes an insurance policy with another insurance company so as to re-insure the already insured risks. This is a method of spreading insurable risks. The agreement does not change the position of the insurer with the client.
  5. Group Insurance: This type of insurance is made by the employer to protect the employees as a group against hazardous or accidental events while rendering productive services.
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