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What type of insurance is typically purchased by professionals like doctors and lawyers?
What type of insurance is typically purchased by professionals like doctors and lawyers?
What is the primary purpose of a personal liability policy?
What is the primary purpose of a personal liability policy?
What type of insurance is essential for businesses that use motor vehicles?
What type of insurance is essential for businesses that use motor vehicles?
What type of insurance protects against claims made by disgruntled patients or clients?
What type of insurance protects against claims made by disgruntled patients or clients?
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What type of insurance is necessary to protect a business's property, including buildings and inventory?
What type of insurance is necessary to protect a business's property, including buildings and inventory?
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What type of insurance is typically covered under an automobile policy?
What type of insurance is typically covered under an automobile policy?
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What is a common way for businesses to insure against injury to workers on the job?
What is a common way for businesses to insure against injury to workers on the job?
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What type of insurance covers a person against lawsuits resulting from accidents or other incidents?
What type of insurance covers a person against lawsuits resulting from accidents or other incidents?
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What is the primary purpose of insurance?
What is the primary purpose of insurance?
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What is a key characteristic of an insurer?
What is a key characteristic of an insurer?
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What is the term for uncertainty concerning loss?
What is the term for uncertainty concerning loss?
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What is an example of a moral hazard?
What is an example of a moral hazard?
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What is the term for the cause of loss?
What is the term for the cause of loss?
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What is the term for a condition that tends to create or increase the chance of loss?
What is the term for a condition that tends to create or increase the chance of loss?
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What is the term for the entity that receives the payment, except in the case of life insurance?
What is the term for the entity that receives the payment, except in the case of life insurance?
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What is the principle behind the concept of insurance?
What is the principle behind the concept of insurance?
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What is the primary function of the 'Paluwagan' System in the Philippines?
What is the primary function of the 'Paluwagan' System in the Philippines?
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Which of the following is NOT a characteristic of the 'Bayanihan' System?
Which of the following is NOT a characteristic of the 'Bayanihan' System?
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What is the primary difference between the 'Paluwagan' System and the 'Bayanihan' System?
What is the primary difference between the 'Paluwagan' System and the 'Bayanihan' System?
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Who was the first insurance company to operate in the Philippines?
Who was the first insurance company to operate in the Philippines?
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What type of insurance was initially offered by insurance companies in the Philippines?
What type of insurance was initially offered by insurance companies in the Philippines?
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What is the name of the practice in the Philippines where friends and relatives of a deceased member give cash donations to the grieving family for burial expenses?
What is the name of the practice in the Philippines where friends and relatives of a deceased member give cash donations to the grieving family for burial expenses?
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When was the 'Paluwagan' System first introduced in the Philippines?
When was the 'Paluwagan' System first introduced in the Philippines?
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What is the primary objective of insurance companies in the Philippines?
What is the primary objective of insurance companies in the Philippines?
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What type of insurance covers loss of earnings if business operations are interrupted?
What type of insurance covers loss of earnings if business operations are interrupted?
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Which type of liability insurance policy covers liability incurred on the premises?
Which type of liability insurance policy covers liability incurred on the premises?
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What is the primary purpose of Life Insurance or Life Assurance?
What is the primary purpose of Life Insurance or Life Assurance?
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What is a common risk that businesses face, leading them to purchase Liability Insurance?
What is a common risk that businesses face, leading them to purchase Liability Insurance?
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What is a benefit provided by Life Insurance in the event of the insured individual's death?
What is a benefit provided by Life Insurance in the event of the insured individual's death?
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What is a type of liability insurance that covers liability resulting from warranties on products?
What is a type of liability insurance that covers liability resulting from warranties on products?
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What is the primary service of Life Insurance in terms of Family Protection?
What is the primary service of Life Insurance in terms of Family Protection?
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What type of insurance policy would cover damages caused by independent contractors engaged by the insured?
What type of insurance policy would cover damages caused by independent contractors engaged by the insured?
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Which type of insurance does not offer maturity benefits?
Which type of insurance does not offer maturity benefits?
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What is the primary purpose of non-life insurance?
What is the primary purpose of non-life insurance?
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Which of the following is not typically a characteristic of life insurance?
Which of the following is not typically a characteristic of life insurance?
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What determines the payout amount in case of a non-life insurance claim?
What determines the payout amount in case of a non-life insurance claim?
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Which type of insurance is typically associated with financial planning?
Which type of insurance is typically associated with financial planning?
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What is the primary difference between life insurance and non-life insurance in terms of premium payments?
What is the primary difference between life insurance and non-life insurance in terms of premium payments?
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Which of the following types of insurance is not covered under casualty insurance?
Which of the following types of insurance is not covered under casualty insurance?
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What is the primary purpose of casualty insurance?
What is the primary purpose of casualty insurance?
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Study Notes
Forerunners of Insurance in the Philippines
- The "Bayanihan" System, where community members contribute time and resources to help someone in need, is a forerunner of modern insurance in the Philippines.
- The "Paluwagan" System, where people contribute funds to be used when someone needs help, is also a forerunner of modern insurance.
- The "Äbuloy" System, where friends and relatives of a deceased member give cash donations to the grieving family for burial expenses, is another forerunner.
Insurance in the Philippines
- Insurance was first introduced in the Philippines in March 1829 by Lloyd's of London.
- The group of Russell and Sturgis was appointed by the Union Insurance Society of Canton to act as insurance agents in Manila in 1839.
- Business was limited to non-life insurance initially.
Insurance Basics
- Insurance is a form of protection from financial losses.
- Three key points of insurance:
- Transfer of risk from the insured to the insurer.
- Insureds contribute to a common fund from which losses are paid.
- The insurer pools or combines a large number of separate exposure units.
- The basic principle of insurance is that an entity chooses to spend small periodic amounts of money against the possibility of a huge unexpected loss.
Key Insurance Terms
- Insurer: The company or person who promises to reimburse the insured.
- Insured (Assured): The one who receives the payment, except in life insurance, where payment goes to the beneficiary.
- Risk: Uncertainty concerning loss.
- Peril: The cause of loss (e.g. fire, lightning, earthquake).
- Hazard: Condition that tends to create or increase the chance of loss from a given peril (e.g. low-lying areas, storing flammable materials).
- Physical Hazard: Objective characteristics that increase the chance of loss (e.g. manufacturer of combustible goods).
- Moral Hazard: Subjective characteristics of the insured (e.g. dishonesty, credit standing, past losses).
- Morale Hazard: Characterized by carelessness or indifference to loss because of insurance coverage.
Insurance Products and Services
- Types of business insurance:
- Workers' Compensation: Insurance against injury to workers on the job.
- Automobile Insurance: Insurance covering personal injury, property damage, and general liability.
- Property Insurance: Insurance covering damage or loss to a company's own property or to property of others stored on the premises.
- Malpractice Insurance: Insurance for professionals to protect against claims made by disgruntled patients or clients.
- Business Interruption Insurance: Insurance covering loss of earnings if business operations are interrupted.
- Liability Insurance: Insurance covering various types of risks that could result in substantial liabilities.
- Life Insurance: A contract between a policy owner and an insurer, where the insurer agrees to pay an insured's designated beneficiary a benefit upon the occurrence of the insured individual's death or other event.
- Three great services of life insurance:
- Family Protection: Life insurance provides a definite sum of money to replace the lost income of the breadwinner.
- Casualty Insurance: Insurance covering loss or liability arising from accident or mishap, excluding certain types of loss.
- Differences between life insurance and non-life insurance:
- Benefits of Maturity: Life insurance offers maturity benefits after specific tenures, while non-life insurance mostly doesn't give any maturity benefits.
- Premium Payments: Life insurance premiums are generally paid annually for a specific tenure, while non-life insurance premiums are mostly paid in one go.
- Policy Duration: Life insurance policies are generally long-term, while non-life insurance policies are short-term.
- Role in Planning Finances: Life insurance can be an investment avenue for different financial goals, while non-life insurance just protects valuables against crisis.
- Claim of Insurance Amount: In life insurance, the assured sum is paid either on death of the insured person or maturity of the policy, while in non-life insurance, the loss is compensated in case of unfortunate events as per the policy terms and conditions.
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Description
Discover the traditional systems in the Philippines that paved the way for modern insurance. Learn about Bayanihan, Paluwagan, and Äbuloy systems and their roles in shaping the country's insurance landscape.
