FI351. Principles of Insurance

FI351. Principles of Insurance.





Department of Economics and Finance,                                                       Course No.  FI351

                                                                                                                        Revision Spring 2001

Title of Course: Principles of Insurance


  I.        Catalog Description and Credit Hours of Course:


            Survey course covering general principles of insurance.                                      (3)


 II.       Prerequisite(s):  Junior Standing.


III.       Purpose or Objectives of the Course:


            A.        To provide a practical basis of judgment for:

                        1.         A student as a future insurance purchaser (Demonstrate ability to make informed, intelligent value decisions)


                         2.        As a purchaser for business purposes in a management  position . (Demonstrate capabilities for critical thinking, reasoning and analyzing.)


                        3.         As an exploratory course for students who may want to enter some phase of the insurance industry as a future occupation. (Demonstrate ability to integrate the breadth and diversity of knowledge and experience.)


 IV.      Expectations of Students:


Study assigned text material, attend class and take notes from lecture, complete a term paper on some insur­ance-related topic to be selected or assigned.


V.        Course Content or Outline:                                                               50 MINUTE PERIODS


            A.        Conditions Favoring Growth of Insurance                                                          3

                        1.         Ethics in the insurance environment

                        2.         How insurance handles risk


            B.         Types of Insurers and Their Marketing Systems                                     2

                        1.         Fields of coverage

                        2.         Stock vs mutual companies

                         3.         Lloyds associations and other insurers

                        4.         Distribution systems


            C.        Loss of Human Life Values; Needs and Uses for Life Insurance             7

                        1.         Perils

                                    a.         Death

                                    b.         Disability

                                    c.         Old Age

                        2.         Family needs

                        3.         Personal needs

                         4.         Business needs

                        5.         Social needs

                        6.         Methods of determining amount of coverage needed


            D.        Life Insurance Products                                                                                    8

                         1.        Term insurance

                         2.        Whole Life insurance

                         3.        Endowment policies

                         4.        How rates are figured

                         5.        Package policies

                         6.        Variable Life

                         7.        Universal and Adjustable Life

                         8.        Term vs permanent coverage

                         9.        Joint Life

                        10.       Group Life

                        11.       Contract Provisions


            E.         Annuities                                                                                                          3

                        1.         Structure

                        2.         Characteristics

                        3.         Taxation


            F.         Retirement Planning                                                                                          3

                        1.         Pension and profit sharing plans

                        2.         IRA’s and SEPP’s (Including Roth, Education and SIMPLE IRA’s)

                        3.         TDA’s (403B)

                        4.         401(k) plans

                        5.         Benefits of tax sheltering


            G.        Financial and Estate Planning                                                                             6

                        1.         Federal estate and gift tax issues

                        2.         Wills and trusts

                        3.         Minimizing the tax

                        4.         Paying the tax with discounted dollars

                        5.         Selecting a life insurance company

                        6.         Using industry financial ratings and other public performance data


            H.        Health Insurance                                                                                                           4

                        1.         Plans and provisions

                        2.         Group vs Individual

                        3.         Types of contracts

4.                  Disability income needs and uses

5.                  Long Term Care Insurance


            I.          The Liability Risk                                                                                              3

                        1.         Basic laws of negligence

                        2.         Common law defenses

                        3.         Other defenses

                        4.         Trend toward absolute liability

                        5.         Product liability

                        6.         Professional liability



            J.          Homeowners Insurance                                                                                    3

                        1.         Needs and uses

                        2.         Forms and contracts

                        3.         Various coverages

                        4.         Co-insurance and deductibles


            K.        Automobile Insurance                                                                                       3

                        1.         Personal auto policy coverages

                        2.         Insurance and the law

                        3.         Recent trends

                                                                                                Total                                      45


VI.       Textbook(s) and/or Other Required Materials or Equipment:


            A.        Risk Management and Insurance, 11th ed., Trieschmann, Gustavson & Holt.  South-Western,



            B.         Assigned library references.


VII.  Basis for Student Evaluations:


            A.        Attendance and class contribution.


            B.         Completion of term paper.


            C.        Results on tests and final examination.


Dempster Hall 205
Economics and Finance Department
One University Plaza, MS 5845
Cape Girardeau, Missouri 63701