风险管理与保险前半学期课后练习答案：IMch04

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1、CHAPTER 4Life, Health, and Loss of Income ExposuresEXPOSURES DUE TO PREMATURE DEATHExecutor FundIncome Needs of SurvivorsSurviving ChildrenSurviving SpouseOther Surviving DependentsBusiness-Related ExposuresLikelihood of Premature DeathNeeds versus Human Life ValuesMedical Care ExpensesHospitalizati

2、onPhysicians and Surgeons ServicesDental CarePrescription Drugs and Other ExpensesMental Health ServicesLong-Term CareLoss of IncomeCauses of DisabilityLength of DisabilityEffects of DisabilityOTHER INCOME LOSS EXPOSURESUnemploymentRetirementKEY TERMS AND CONCEPTSContinuance tablesExperience ratingP

3、artial disabilityCost shiftingHome health carePermanent disabilityCustodial nursing homesHuman life valuePersonal care homesDefensive medicineIntermediate nursing home carePremature deathDisability lossKey employeeSkilled nursing home careExecutorLong-term careTemporary disabilitiesExecutor fundMort

4、ality tableTotal disabilityANSWERS TO QUESTIONS FOR REVIEW AND DISCUSSION1. The executor fund is designed to pay for the expenses associated with the funeral and burial of the decedent, estate and inheritance taxes, estate distribution and administration costs, and the outstanding debts of the deced

5、ent.2.One form of business-related premature death exposure involves the death of a key employee. The death of an employee who performs services that would be particularly hard to replace may cause the delay or abandonment of some of the firms projects. The death of a key employee may also cause ext

6、ra costs for replacement and training and might result in the loss of customers. Another business-related exposure involves the death of a person with an ownership interest in the business. This death could cause ownership to pass to undesirable beneficiaries who could harm the value of the ownershi

7、p interests of the surviving owners and the estate of the deceased owner.3.The answers will differ, but each answer should reflect a change in circumstances that would cause a change in income need for the survivor.a.Surviving children: As children age, the time that they will be dependent on their

8、parents shortens. Further, a child could become sick or disabled and need special health care, or a child could start college.b.Surviving spouse: The spouse could become sick or disabled or develop a marketable skill that decreases dependence on the other, or the children may attain an age that woul

9、d allow the spouse to switch to full-time employment.c. Surviving parents: A parent could become disabled or sick and require medical or convalescent care.4.a.Age 4 or 5 years for males, age 5 or 6 for femalesb.6.8c.0.99753, calculated as: 1 (0.47 + 0.48 + 0.50 + 0.50 + 0.52)/1,0005.$689,787, calcul

10、ated as: $824,849 ($26,507 + $26,758 + $27,010 + $27,265 + $27,522)6. The five major categories of medical expenses are hospitalization, physicians and surgeons services, dental care, mental health services, and long-term care. Currently, hospital costs account for almost half of all personal health

11、 care expenditures.7. Skilled nursing home care includes ongoing medical services, with residents seen regularly by doctors. Custodial nursing home care does not include medical services and concentrates on the provision of personal care services, such as assistance with bathing, dressing, eating, a

12、nd other daily activities. Intermediate nursing home care includes a level of medical services that is less than those provided by a skilled nursing home.8. A disability may result in either a total or a partial loss in income, may be either temporary or permanent, may involve a subjective element,

13、and may increase the familys expenses by the amount needed for the disabled persons personal consumption and health care costs. Death always involves a total loss of income, is always permanent, is certainly not subjective, and reduces the familys expenses by the amount of the decedents personal con

14、sumption.9.Some reasons for the increased proportion of income spent for medical care in the United States may include the following: people are living longer and require more medical care in advancing years, treatments are being discovered for sicknesses that were untreatable in the past, increasin

15、g frequency and severity of liability awards causes higher malpractice premiums and may encourage the practice of “defensive medicine”, medical technology tends to be expensive, and hospitals and physicians may wastefully purchase equipment that their patients already have access to from competing s

16、ources.10. Disabilities may be total or partial, depending on whether or not the person is completely incapable of gainful employment. Disabilities may also be either temporary or permanent, depending on whether the person is expected to eventually recover enough to return to work. Disability losses

17、 have a subjective element because different people may have differing tolerances for pain, work ethics, or levels of income loss. Two people suffering from the same injury could have different periods of disability due to these differences.11. To be eligible to collect unemployment insurance benefi

18、ts, an unemployed worker usually must either have worked for some minimum period during the previous 12 months or have earned some minimum amount of wages. Many states require a one-week waiting period before benefit payments begin.12. The degree of risk associated with the occurrence of death is ze

19、ro because everyone is certain to die. Since risk can be defined as uncertainty, there is no risk associated with the question of whether a persons death will occur. The risk related to death is related to the time that the death occurs. Premature death can present several financial exposures includ

20、ing the expenses arising from the death, such as funeral and estate administration expenses; income for surviving relatives, such as a spouse, children, or aging parents, who were dependent on the decedents income; and business risks, such as the loss of a key employee or the transfer of a deceased

21、owners interest in the business. Financial risks associated with living too long may include the exhaustion of retirement resources, the cost of a nursing home for someone physically unable to care for him or herself, and the higher medical costs often associated with advancing age.13.Some possible

22、reasons for the “hump” at ages 15 to 30 may include war-related deaths, a higher accident rate, a higher suicide rate, or an increased frequency of drug or alcohol abuse at these ages. The higher death rate at these ages for males may be partially explained by the higher likelihood of men to suffer

23、war-related deaths and motor vehicle deaths.14.The term human life value refers to the present value of all of the income less taxes and personal maintenance expenses that a person is expected to earn throughout life. This may differ from the amount of financial need that will be experienced after a

24、 persons death because this term does not include consideration of individual circumstances, resources, or income needs. Human life value is the best measure of loss severity used to compute damages for wrongful death claims because these claims are meant to compensate survivors for their actual los

25、s and not to provide them with the necessary funds to meet their needs.15.Answers may vary with the opinion of the student, but it seems that people have a tendency to more frequently recognize property loss exposures than business-related premature death exposures. A key employee may be more import

26、ant than a building because a key employee may not be able to be replaced at any cost. A key employee may have possessed or acquired special skills, talents, relationships, or knowledge that are very valuable to a company and are perhaps irreplaceable.16.A decrease in death rates might result from m

27、edical advances that extend the lives of people who are suffering from or are susceptible to disabilities. These people might include those who are elderly, physically or mentally handicapped, or suffering from a debilitating disease. While at one time these people would have died, the medical advan

28、ces may extend their lives without enabling them to return to work, thereby increasing the disability rate. Other factors that might explain an increase in the disability rate include societal changes in pain thresholds, disability benefits, and work ethics.SUPPLEMENTARY QUESTIONS1.It has been sugge

29、sted that the family income needs after a parents premature death are greatly reduced in many families today in which both spouses are working. Therefore, it has been said, the death of a spouse no longer produces the total financial catastrophe that once might have occurred with the death of the “b

30、readwinner” spouse. Do you agree? Why or why not?In a sense the argument is true. Because both spouses work, the financial impact of the death of one may be reduced greatly, but typically is not eliminated. At least one study has demonstrated that total insurance purchased by two-working-spouse fami

31、lies is less than that purchased when only one spouse works. On the other hand, families with two incomes typically adjust their lifestyles to depend on the incomes of both spouses. Furthermore, needs still exist for child care costs, future education of children, etc.2. Suggest and discuss possible

32、 reasons for the increase in the proportion of disposable income that is being spent on health care in the United States.Possible reasons that could be suggested and discussed include the following: higher standards of medical care, a larger proportion of elderly people, increased expenses for profe

33、ssional liability insurance due to the increasing incidence and severity of litigation, the practice of “defensive medicine” in which physicians are overly cautious in an effort to avoid future litigation, increased and expense for more advanced medical technology.3.Should a family be concerned abou

34、t the financial impact of the death of a spouse who does not work outside of the home? Why or why not? What additional expenses might a family with children expect to incur with the death of a spouse who does not earn an income?Despite the fact that an income would not be lost, there may be a signif

35、icant financial impact at the death of a non-working spouse. Additional expenses may be required after this death. The surviving spouse may feel a need to reduce the amount of time that is spent at work in order to spend more time with the children and to assume more domestic responsibilities. The s

36、urviving spouse may also incur expenses such as child care and housekeeping that were not previously required. In addition, there will be expenses in relation to the funeral, burial, and estate administration.4.Most of the expenses involved with death discussed in this chapter involved risks arising

37、 from premature death. However, the expenses in the executor fund would be present even if the death occurred when expected. Identify and discuss an example of an expense that might increase if the death occurred as expected instead of prematurely.Estate taxes may become more burdensome as a person

38、ages and accumulates wealth.5. List and discuss several reasons that a person might be more concerned about the losses associated with disability than with those associated with premature death.Disability directly affects the financial status of the person involved. A person may be less concerned with the financial impact of death because the person wont be around to suffer the loss. Premature death reduces the amount of consumption of a family by the amount that would be consumed by the decedent. However, disability does not have this financial advantage.