Personal Finance 1st Edition by Jack R. Kapoor

Exercise 6

1?What is the purpose of insurance?

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2?How are the most common risks classified?

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3?What is the difference between pure risk and speculative risk?

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4?What are the methods of managing risk?

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5?What are the steps in planning your personal insurance coverage?

Action Application Locate Web sites that provide useful information for selecting and comparing various insurance coverages.

Step 1 of 5

(1)

Purpose of Insurance:

Insurance gives protection against the possible financial loss. Insurance is taken by the individual in order to protect them and their family from any possible financial loss which may occur in the future. After taking insurance an individual gets a peace of mind that their survivors will not suffer for money, money will be available in case of any medical emergency, protection against the home and the personal belongings and personal coverage along with property coverage in case of damage caused by an individual driving. Because of the above mentioned reasons an individual prefer to take insurance.