AP®︎ Business with Personal Finance: Topic 5.2 Flashcards
Master key terms and definitions for Topic 5.2 of AP Business with Personal Finance – Managing Personal Risk to help you prep for quizzes and the AP exam.
Managing Personal Risk (Risk Management)
Identifying possible losses and deciding how to reduce, retain, or transfer their financial consequences
Identifying possible losses and deciding how to reduce, retain, or transfer their financial consequences
An arrangement that transfers specified financial risks to an insurer in exchange for a premium
A potential loss caused by chance that is quantifiable and statistically predictable
Insurable risk involving the insured person’s health or well-being, such as injury, illness, disability, or death
Insurable risk involving loss of or damage to property owned or used by an individual
The risk of being legally responsible for injury to another person or damage to another person’s or entity’s property
A contract stating the losses an insurer covers and the conditions under which it will pay
The person who owns or purchases an insurance policy
The person or property protected by an insurance policy
The company that assumes covered financial risk and pays eligible claims
The price paid for an insurance policy, commonly monthly, semi-annually, or annually
The policy’s protection, including the losses covered and the amount the insurer may pay
A request for payment or reimbursement after a covered loss
The portion of a covered loss the policyholder must pay before or alongside the insurer’s payment
The maximum amount an insurer will pay for a particular loss or category of loss
A designated recipient entitled to receive life insurance proceeds after the insured person’s death
Insurance covering medically necessary health care and, under some policies, preventive care
Insurance that may cover losses to an insured vehicle, injuries, and liability for harm caused to others
Auto coverage for covered injuries or property damage the insured causes to others; most states require it
Insurance covering specified losses to a home and belongings and commonly providing liability protection
Insurance protecting a tenant’s personal property against covered losses and potentially providing liability protection
Insurance that pays designated beneficiaries when the insured person dies, often to replace income or support dependents
A limited form of insurance under which a provider agrees to repair, replace, or service a purchase under specified conditions
An individual’s willingness to accept uncertain financial losses
Intentional deception by an insurance buyer, claimant, insurer, or seller for unlawful financial benefit
Unfair or deceptive lending practices that exploit borrowers through misleading terms, manipulation, or aggressive pressure
An attempt to obtain personal or financial information by impersonating a trusted person or organization
Unauthorized use of another person’s identifying information to access accounts, make purchases, or obtain credit
Fraudulent offers or schemes, often marked by urgency, secrecy, threats, guaranteed returns, or demands for money or information
A restriction on access to a person’s credit file that makes opening new fraudulent credit accounts more difficult
Identify requirements and exposures, assess losses the household can absorb, consider dependents and risk tolerance, compare policy costs and terms, and select protection for losses the household cannot reasonably bear
