x̄ - > Laughter

 Laughter is a pleasant physical reaction consisting usually of rhythmical, often audible contractions of the diaphragm and other parts of the respiratory system. It is a response to certain external or internal stimuli. Laughter can arise from such activities as being tickled, or from humorous stories or thoughts. Most commonly, it is considered an auditory expression of a number of positive emotional states, such as joy, mirth, happiness, or relief. On some occasions, however, it may be caused by contrary emotional states such as embarrassment, surprise, or confusion such as nervous laughter or courtesy laugh. Age, gender, education, language, and culture are all indicators as to whether a person will experience laughter in a given situation. Some other species of primates show laughter-like vocalizations in response to physical contact such as wrestling, play chasing, or tickling. Laughter is a part of human behavior regulated by the brain, helping humans clarify their intentions in social interaction and providing an emotional context to conversations. Laughter is used as a signal for being part of a group—it signals acceptance and positive interactions with others. Laughter is sometimes seen as contagious, and the laughter of one person can provoke laughter from others as a positive feedback. The study of humor and laughter, and its psychological and physiological effects on the human body, is called gelotology. Nature Laughter might be thought of as an audible expression or appearance of excitement, an inward feeling of joy and happiness. It may ensue from jokes, tickling, and other stimuli completely unrelated to psychological state, such as nitrous oxide. One group of researchers speculated that noises from infants as early as 16 days old may be vocal laughing sounds or laughter, however the weight of the evidence supports the appearance of such sounds at 15 weeks to four months of age.

 Laughter researcher said: "Laughter is a mechanism everyone has; laughter is part of universal human vocabulary. There are thousands of languages, hundreds of thousands of dialects, but everyone speaks laughter in pretty much the same way." Babies have the ability to laugh before they ever speak. Children who are born blind and deaf still retain the ability to laugh. Provine argues that "Laughter is primitive, an unconscious vocalization." Provine argues that it probably is genetic. In a study of the "Giggle Twins", two happy twins who were separated at birth and only reunited 43 years later, Provine reports that "until they met each other, neither of these exceptionally happy ladies had known anyone who laughed as much as they did." They reported this even though they had been brought together by their adoptive parents, who they indicated were "undemonstrative and dour". He indicates that the twins "inherited some aspects of their laugh sound and pattern, readiness to laugh, and maybe even taste in humor". Scientists have noted the similarity in forms of laughter induced by tickling among various primates, which suggests that laughter derives from a common origin among primate species. Spotted hyenas, another species of animal, was also known as the laughing hyena because of the way their vocals sound like when they communicate. A very rare neurological condition has been observed whereby the sufferer is unable to laugh out loud, a condition known as aphonogelia. Brain Neurophysiology indicates that laughter is linked with the activation of the ventromedial prefrontal cortex, that produces endorphins. Scientists have shown that parts of the limbic system are involved in laughter. This system is involved in emotions and helps us with functions necessary for humans' survival. The structures in the limbic system that are involved in laughter are the hippocampus and the amygdala. The December 7, 1984, Journal of the American Medical Association describes the neurological causes of laughter as follows: Some drugs are well known for their laughter-facilitating properties, while the others, like salvinorin A, can even induce bursts of uncontrollable laughter. A research article was published December 1, 2000 on the psycho-evolution of laughter. Health A link between laughter and healthy function of blood vessels was first reported in 2005 by researchers at the University of Maryland Medical Center with the fact that laughter causes the dilatation of the inner lining of blood vessels, the endothelium, and increases blood flow. Drs. Michael Miller and William Fry theorize that beta-endorphin like compounds released by the hypothalamus activate receptors on the endothelial surface to release nitric oxide, thereby resulting in dilation of vessels. Other cardioprotective properties of nitric oxide include reduction of inflammation and decreased platelet aggregation.

 Therapy Laughter has been used as a therapeutic tool for many years because it is a natural form of medicine. Laughter is available to everyone and it provides benefits to a person's physical, emotional, and social well being. Some of the benefits of using laughter therapy are that it can relieve stress and relax the whole body. It can also boost the immune system and release endorphins to relieve pain. Additionally, laughter can help prevent heart disease by increasing blood flow and improving the function of blood vessels. Some of the emotional benefits include diminishing anxiety or fear, improving overall mood, and adding joy to one's life. Laughter is also known to reduce allergic reactions in a preliminary study related to dust mite allergy sufferers. Laughter therapy also has some social benefits, such as strengthening relationships, improving teamwork and reducing conflicts, and making oneself more attractive to others. Therefore, whether a person is trying to cope with a terminal illness or just trying to manage their stress or anxiety levels, laughter therapy can be a significant enhancement to their life. Ramon Mora-Ripoll in his study on The Therapeutic Value Of Laughter In Medicine, stated that laughter therapy is an inexpensive and simple tool that can be used in patient care. It is a tool that is only beneficial when experienced and shared. Care givers need to recognize the importance of laughter and possess the right attitude to pass it on. He went on to say that since this type of therapy is not widely practiced, health care providers will have to learn how to effectively use it. In another survey, researchers looked at how Occupational Therapists and other care givers viewed and used humor with patients as a means of therapy. Many agreed that while they believed it was beneficial to the patients, the proper training was lacking in order to effectively use It. The study used laughter yoga, comedy, clown and jokes. The result showed that laughter therapy was helpful in improving quality of life and cancer symptoms in some areas for cancer survivors. Improvements were seen in the area of depression, anxiety and stress levels. There were limited harmful side effects. Laughter therapy should be used in conjunction with other cancer treatment. is a subject that has received attention in the written word for millennia. The use of humor and laughter in literary works has been studied and analyzed by many thinkers and writers, from the Ancient Greek philosophers onward. Henri Bergson's Laughter: An Essay on the Meaning of the Comic is a notable 20th-century contribution.

x̄ - > Insurance

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. An entity which provides insurance is known as an insurer, an insurance company, an insurance carrier or an underwriter. A person or entity who buys insurance is known as a policyholder, while a person or entity covered under the policy is called an insured. Policyholder and insured are often used as but are not necessarily synonyms, as coverage can sometimes extend to additional insureds who did not buy the insurance. The insurance transaction involves the policyholder assuming a guaranteed, known, and relatively small loss in the form of a payment to the insurer in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms. Furthermore, it usually involves something in which the insured has an insurable interest established by ownership, possession, or pre-existing relationship. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insurer will compensate the insured, or their designated beneficiary or assignee. The amount of money charged by the insurer to the policyholder for the coverage set forth in the insurance policy is called the premium. If the insured experiences a loss which is potentially covered by the insurance policy, the insured submits a claim to the insurer for processing by a claims adjuster. A mandatory out-of-pocket expense required by an insurance policy before an insurer will pay a claim is called a deductible. The insurer may hedge its own risk by taking out reinsurance, whereby another insurance company agrees to carry some of the risks, especially if the primary insurer deems the risk too large for it to carry. History Early methods Methods for transferring or distributing risk were practiced by Babylonian, Chinese and Indian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel capsizing. Codex Hammurabi Law 238 stipulated that a sea captain, ship-manager, or ship charterer that saved a ship from total loss was only required to pay one-half the value of the ship to the ship-owner. In the Digesta seu Pandectae, the second volume of the codification of laws ordered by Justinian I of the Eastern Roman Empire, a legal opinion written by the Roman jurist Paulus at the beginning of the Crisis of the Third Century in 235 AD was included about the Lex Rhodia that articulates the general average principle of marine insurance established on the island of Rhodes in approximately 1000 to 800 BC as a member of the Doric Hexapolis, plausibly by the Phoenicians during the proposed Dorian invasion and emergence of the purported Sea Peoples during the Greek Dark Ages that led to the proliferation of the Doric Greek dialect. The law of general average constitutes the fundamental principle that underlies all insurance. Concepts of insurance has been also found in 3rd century BC Hindu scriptures such as Dharmasastra, Arthashastra and Manusmriti. The ancient Greeks had marine loans. Money was advanced on a ship or cargo, to be repaid with large interest if the voyage prospers. However, the money would not be repaid at all if the ship were lost, thus making the rate of interest high enough to pay for not only for the use of the capital but also for the risk of losing it. Loans of this character have ever since been common in maritime lands under the name of bottomry and respondentia bonds. The direct insurance of sea-risks for a premium paid independently of loans began in Belgium about 1300 AD. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. The earliest known policy of life insurance was made in the Royal Exchange, London, on the 18th of June 1583, for £383, 6s. 8d. for twelve months on the life of William Gibbons. A number of attempted fire insurance schemes came to nothing, but in 1681, economist Nicholas Barbon and eleven associates established the first fire insurance company, the "Insurance Office for Houses", at the back of the Royal Exchange to insure brick and frame homes. Initially, 5,000 homes were insured by his Insurance Office. At the same time, the first insurance schemes for the underwriting of business ventures became available. By the end of the seventeenth century, London's growth as a centre for trade was increasing due to the demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee house, which became the meeting place for parties in the shipping industry wishing to insure cargoes and ships, including those willing to underwrite such ventures. These informal beginnings led to the establishment of the insurance market Lloyd's of London and several related shipping and insurance businesses. The first life insurance policies were taken out in the early 18th century. The first company to offer life insurance was the Amicable Society for a Perpetual Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas Allen. Upon the same principle, Edward Rowe Mores established the Society for Equitable Assurances on Lives and Survivorship in 1762. It was the world's first mutual insurer and it pioneered age based premiums based on mortality rate laying "the framework for scientific insurance practice and development" and "the basis of modern life assurance upon which all life assurance schemes were subsequently based." In the late 19th century "accident insurance" began to become available. The first company to offer accident insurance was the Railway Passengers Assurance Company, formed in 1848 in England to insure against the rising number of fatalities on the nascent railway system. By the late 19th century governments began to initiate national insurance programs against sickness and old age. Germany built on a tradition of welfare programs in Prussia and Saxony that began as early as in the 1840s. In the 1880s Chancellor Otto von Bismarck introduced old age pensions, accident insurance and medical care that formed the basis for Germany's welfare state. In Britain more extensive legislation was introduced by the Liberal government in the 1911 National Insurance Act. This gave the British working classes the first contributory system of insurance against illness and unemployment. This system was greatly expanded after the Second World War under the influence of the Beveridge Report, to form the first modern welfare state. Principles Insurance involves pooling funds from many insured entities to pay for the losses that only some insureds may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be an insurable risk, the risk insured against must meet certain characteristics. Insurance as a financial intermediary is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses. Insurability Risk which can be insured by private companies typically share seven common characteristics: # Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies cover individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include Lloyd's of London, which is famous for insuring the life or health of actors, sports figures, and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates. # Definite loss: This type of loss takes place at a known time and place from a known cause. The classic example involves the death of an insured person on a life-insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place, or cause is identifiable. Ideally, the time, place, and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements. # Accidental loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements such as ordinary business risks or even purchasing a lottery ticket are generally not considered insurable. # Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses, these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer. # Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, then it is not likely that insurance will be purchased, even if on offer. Furthermore, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, then the transaction may have the form of insurance, but not the substance. # Calculable loss: There are two elements that must be at least estimable, if not formally calculable: the probability of loss and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. # Limited risk of catastrophically large losses: Insurable losses are ideally independent and non-catastrophic, meaning that the losses do not happen all at once and that individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Capital constrains insurers' ability to sell earthquake insurance as well as wind insurance in hurricane zones. In the United States, the federal government insures flood risk in specifically identified areas. In commercial fire insurance, it is possible to find single properties whose total exposed value is well in excess of any individual insurer's capital constraint. Such properties are generally shared among several insurers or are insured by a single insurer which syndicates the risk into the reinsurance market. Legal When a company insures an individual entity, there are basic legal requirements and regulations. Several commonly cited legal principles of insurance include: # Indemnity – the insurance company indemnifies or compensates the insured in the case of certain losses only up to the insured's interest. # Benefit insurance – as it is stated in the study books of The Chartered Insurance Institute, the insurance company does not have the right of recovery from the party who caused the injury and must compensate the Insured regardless of the fact that Insured had already sued the negligent party for the damages # Insurable interest – the insured typically must directly suffer from the loss. Insurable interest must exist whether property insurance or insurance on a person is involved. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be determined by the kind of insurance involved and the nature of the property ownership or relationship between the persons. The requirement of an insurable interest is what distinguishes insurance from gambling. # Utmost good faith – the insured and the insurer are bound by a good faith bond of honesty and fairness. Material facts must be disclosed. # Contribution – insurers, which have similar obligations to the insured, contribute in the indemnification, according to some method. # Subrogation – the insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for the insured's loss. The Insurers can waive their subrogation rights by using the special clauses. # Causa proxima, or proximate cause – the cause of loss must be covered under the insuring agreement of the policy, and the dominant cause must not be excluded # Mitigation – In case of any loss or casualty, the asset owner must attempt to keep loss to a minimum, as if the asset was not insured. Indemnification To "indemnify" means to make whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance. There are generally three types of insurance contracts that seek to indemnify an insured: # A "reimbursement" policy # A "pay on behalf" or "on behalf of policy" # An "indemnification" policy From an insured's standpoint, the result is usually the same: the insurer pays the loss and claims expenses. If the Insured has a "reimbursement" policy, the insured can be required to pay for a loss and then be "reimbursed" by the insurance carrier for the loss and out of pocket costs including, with the permission of the insurer, claim expenses. Insurers may prohibit certain activities which are considered dangerous and therefore excluded from coverage. One system for classifying activities according to whether they are authorised by insurers refers to "green light" approved activities and events, "yellow light" activities and events which require insurer consultation and/or waivers of liability, and "red light" activities and events which are prohibited and outside the scope of insurance cover. Social effects Insurance can have various effects on society through the way that it changes who bears the cost of losses and damage. On one hand it can increase fraud; on the other it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies. Insurance can influence the probability of losses through moral hazard, insurance fraud, and preventive steps by the insurance company. Insurance scholars have typically used moral hazard to refer to the increased loss due to unintentional carelessness and insurance fraud to refer to increased risk due to intentional carelessness or indifference. Insurers attempt to address carelessness through inspections, policy provisions requiring certain types of maintenance, and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction, some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures—particularly to prevent disaster losses such as hurricanes—because of concerns over rate reductions and legal battles. However, since about 1996 insurers have begun to take a more active role in loss mitigation, such as through building codes. Methods of insurance According to the study books of The Chartered Insurance Institute, there are variant methods of insurance as follows: # Co-insurance – risks shared between insurers # Dual insurance – having two or more policies with overlapping coverage of a risk # Self-insurance – situations where risk is not transferred to insurance companies and solely retained by the entities or individuals themselves # Reinsurance – situations when the insurer passes some part of or all risks to another Insurer, called the reinsurer Insurers' business model Insurers may use the subscription business model, collecting premium payments periodically in return for on-going and/or compounding benefits offered to policyholders. Underwriting and investing Insurers' business model aims to collect more in premium and investment income than is paid out in losses, and to also offer a competitive price which consumers will accept. Profit can be reduced to a simple equation: Insurers make money in two ways: Through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks, and taking the brunt of the risk should it come to fruition. By investing the premiums they collect from insured parties The most complicated aspect of insuring is the actuarial science of ratemaking of policies, which uses statistics and probability to approximate the rate of future claims based on a given risk. After producing rates, the insurer will use discretion to reject or accept risks through the underwriting process. At the most basic level, initial rate-making involves looking at the frequency and severity of insured perils and the expected average payout resulting from these perils. Thereafter an insurance company will collect historical loss-data, bring the loss data to present value, and compare these prior losses to the premium collected in order to assess rate adequacy. Loss ratios and expense loads are also used. Rating for different risk characteristics involves - at the most basic level - comparing the losses with "loss relativities"—a policy with twice as many losses would, therefore, be charged twice as much. More complex multivariate analyses are sometimes used when multiple characteristics are involved and a univariate analysis could produce confounded results. Other statistical methods may be used in assessing the probability of future losses. Upon termination of a given policy, the amount of premium collected minus the amount paid out in claims is the insurer's underwriting profit on that policy. Underwriting performance is measured by something called the "combined ratio", which is the ratio of expenses/losses to premiums. A combined ratio of less than 100% indicates an underwriting profit, while anything over 100 indicates an underwriting loss. A company with a combined ratio over 100% may nevertheless remain profitable due to investment earnings. Insurance companies earn investment profits on "float". Float, or available reserve, is the amount of money on hand at any given moment that an insurer has collected in insurance premiums but has not paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest or other income on them until claims are paid out. The Association of British Insurers has almost 20% of the investments in the London Stock Exchange. In 2007, U.S. industry profits from float totaled $58 billion. In a 2009 letter to investors, Warren Buffett wrote, "we were paid $2.8 billion to hold our float in 2008". In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance-industry insiders, most notably Hank Greenberg, do not believe that it is possible to sustain a profit from float forever without an underwriting profit as well, but this opinion is not universally held. Reliance on float for profit has led some industry experts to call insurance companies "investment companies that raise the money for their investments by selling insurance". Naturally, the float method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards, so a poor economy generally means high insurance-premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the underwriting, or insurance, cycle. Claims Claims and loss handling is the materialized utility of insurance; it is the actual "product" paid for. Claims may be filed by insureds directly with the insurer or through brokers or agents. The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form, such as those produced by ACORD. Insurance company claims departments employ a large number of claims adjusters supported by a staff of records management and data entry clerks. Incoming claims are classified based on severity and are assigned to adjusters whose settlement authority varies with their knowledge and experience. The adjuster undertakes an investigation of each claim, usually in close cooperation with the insured, determines if coverage is available under the terms of the insurance contract, and if so, the reasonable monetary value of the claim, and authorizes payment. The policyholder may hire their own public adjuster to negotiate the settlement with the insurance company on their behalf. For policies that are complicated, where claims may be complex, the insured may take out a separate insurance policy add-on, called loss recovery insurance, which covers the cost of a public adjuster in the case of a claim. Adjusting liability insurance claims is particularly difficult because there is a third party involved, the plaintiff, who is under no contractual obligation to cooperate with the insurer and may in fact regard the insurer as a deep pocket. The adjuster must obtain legal counsel for the insured, monitor litigation that may take years to complete, and appear in person or over the telephone with settlement authority at a mandatory settlement conference when requested by the judge. If a claims adjuster suspects under-insurance, the condition of average may come into play to limit the insurance company's exposure. In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insureds over the validity of claims or claims handling practices occasionally escalate into litigation. Marketing Insurers will often use insurance agents to initially market or underwrite their customers. Agents can be captive, meaning they write only for one company, or independent, meaning that they can issue policies from several companies. The existence and success of companies using insurance agents is likely due to the availability of improved and personalised services. Companies also use Broking firms, Banks and other corporate entities to market their products. Types Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as perils. An insurance policy will set out in detail which perils are covered by the policy and which are not. Below are non-exhaustive lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set out below. For example, vehicle insurance would typically cover both the property risk and the liability risk. A home insurance policy in the United States typically includes coverage for damage to the home and the owner's belongings, certain legal claims against the owner, and even a small amount of coverage for medical expenses of guests who are injured on the owner's property. Business insurance can take a number of different forms, such as the various kinds of professional liability insurance, also called professional indemnity, which are discussed below under that name; and the business owner's policy, which packages into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners' insurance packages the coverages that a homeowner needs. Vehicle insurance Vehicle insurance protects the policyholder against financial loss in the event of an incident involving a vehicle they own, such as in a traffic collision. Coverage typically includes: Property coverage, for damage to or theft of the car Liability coverage, for the legal responsibility to others for bodily injury or property damage Medical coverage, for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses Gap insurance Gap insurance covers the excess amount on your auto loan in an instance where your insurance company does not cover the entire loan. Depending on the company's specific policies it might or might not cover the deductible as well. This coverage is marketed for those who put low down payments, have high interest rates on their loans, and those with 60-month or longer terms. Gap insurance is typically offered by a finance company when the vehicle owner purchases their vehicle, but many auto insurance companies offer this coverage to consumers as well. Health insurance Health insurance policies cover the cost of medical treatments. Dental insurance, like medical insurance, protects policyholders for dental costs. In most developed countries, all citizens receive some health coverage from their governments, paid through taxation. In most countries, health insurance is often part of an employer's benefits. Income protection insurance Disability insurance policies provide financial support in the event of the policyholder becoming unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgage loans and credit cards. Short-term and long-term disability policies are available to individuals, but considering the expense, long-term policies are generally obtained only by those with at least six-figure incomes, such as doctors, lawyers, etc. Short-term disability insurance covers a person for a period typically up to six months, paying a stipend each month to cover medical bills and other necessities. Long-term disability insurance covers an individual's expenses for the long term, up until such time as they are considered permanently disabled and thereafter Insurance companies will often try to encourage the person back into employment in preference to and before declaring them unable to work at all and therefore totally disabled. Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work. Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance. Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury. Casualty insurance Casualty insurance insures against accidents, not necessarily tied to any specific property. It is a broad spectrum of insurance that a number of other types of insurance could be classified, such as auto, workers compensation, and some liability insurances. Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement. Terrorism insurance provides protection against any loss or damage caused by terrorist activities. In the United States in the wake of 9/11, the Terrorism Risk Insurance Act 2002 set up a federal program providing a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism. The program was extended until the end of 2014 by the Terrorism Risk Insurance Program Reauthorization Act 2007. Kidnap and ransom insurance is designed to protect individuals and corporations operating in high-risk areas around the world against the perils of kidnap, extortion, wrongful detention and hijacking. Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions could result in a loss. Life insurance Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. In most states, a person cannot purchase a policy on another person without their knowledge. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed. In many countries, such as the United States and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. In the United States, the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables. Moreover, other income tax saving vehicles plans, Roth IRAs) may be better alternatives for value accumulation. Burial insurance Burial insurance is a very old type of life insurance which is paid out upon death to cover final expenses, such as the cost of a funeral. The Greeks and Romans introduced burial insurance c. 600 CE when they organized guilds called "benevolent societies" which cared for the surviving families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose, as did friendly societies during Victorian times. Property Property insurance provides protection against risks to property, such as fire, theft or weather damage. This may include specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance. The term property insurance may, like casualty insurance, be used as a broad category of various subtypes of insurance, some of which are listed below: Aviation insurance protects aircraft hulls and spares, and associated liability risks, such as passenger and third-party liability. Airports may also appear under this subcategory, including air traffic control and refuelling operations for international airports through to smaller domestic exposures. Boiler insurance insures against accidental physical damage to boilers, equipment or machinery. Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage arising from any cause not otherwise expressly excluded. Builder's risk insurance is coverage that protects a person's or organization's insurable interest in materials, fixtures or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from an insured peril. Crop insurance may be purchased by farmers to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, pests, or disease Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary home insurance policies do not cover earthquake damage. Earthquake insurance policies generally feature a high deductible. Rates depend on location and hence the likelihood of an earthquake, as well as the construction of the home. Fidelity bond is a form of casualty insurance that covers policyholders for losses incurred as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees. Flood insurance protects against property loss due to flooding. Many U.S. insurers do not provide flood insurance in some parts of the country. In response to this, the federal government created the National Flood Insurance Program which serves as the insurer of last resort. Home insurance, also commonly called hazard insurance or homeowners insurance, provides coverage for damage or destruction of the policyholder's home. In some geographical areas, the policy may exclude certain types of risks, such as flood or earthquake, that require additional coverage. Maintenance-related issues are typically the homeowner's responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets. Landlord insurance covers residential or commercial property that is rented to tenants. It also covers the landlord's liability for the occupants at the property. Most homeowners' insurance, meanwhile, cover only owner-occupied homes and not liability or damages related to tenants. Marine insurance and marine cargo insurance cover the loss or damage of vessels at sea or on inland waterways, and of cargo in transit, regardless of the method of transit. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element" coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss. Renters' insurance, often called tenants' insurance, is an insurance policy that provides some of the benefits of homeowners' insurance, but does not include coverage for the dwelling, or structure, with the exception of small alterations that a tenant makes to the structure. Supplemental natural disaster insurance covers specified expenses after a natural disaster renders the policyholder's home uninhabitable. Periodic payments are made directly to the insured until the home is rebuilt or a specified time period has elapsed. Surety bond insurance is a three-party insurance guaranteeing the performance of the principal. Volcano insurance is a specialized insurance protecting against damage arising specifically from volcanic eruptions. Windstorm insurance is an insurance covering the damage that can be caused by wind events such as hurricanes. Liability Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of wilful or intentional acts by the insured. Public liability insurance or general liability insurance covers a business or organization against claims should its operations injure a member of the public or damage their property in some way. Directors and officers liability insurance protects an organization from costs associated with litigation resulting from errors made by directors and officers for which they are liable. Environmental liability or environmental impairment insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants. Errors and omissions insurance is business liability insurance for professionals such as insurance agents, real estate agents and brokers, architects, third-party administrators and other business professionals. Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game, or a hole-in-one at a golf tournament. Professional liability insurance, also called professional indemnity insurance, protects insured professionals such as architectural corporations and medical practitioners against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called medical malpractice insurance. Often a commercial insured's liability insurance program consists of several layers. The first layer of insurance generally consists of primary insurance, which provides first dollar indemnity for judgments and settlements up to the limits of liability of the primary policy. Generally, primary insurance is subject to a deductible and obligates the insured to defend the insured against lawsuits, which is normally accomplished by assigning counsel to defend the insured. In many instances, a commercial insured may elect to self-insure. Above the primary insurance or self-insured retention, the insured may have one or more layers of excess insurance to provide coverage additional limits of indemnity protection. There are a variety of types of excess insurance, including "stand-alone" excess policies, "follow form" excess insurance, and "umbrella" insurance policies. Credit Credit insurance repays some or all of a loan when the borrower is insolvent. Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name "credit insurance" more often is used to refer to policies that cover other kinds of debt. Many credit cards offer payment protection plans which are a form of credit insurance. Trade credit insurance is business insurance over the accounts receivable of the insured. The policy pays the policy holder for covered accounts receivable if the debtor defaults on payment. Collateral protection insurance insures property held as collateral for loans made by lending institutions. Cyber attack insurance Cyber-insurance is a business lines insurance product intended to provide coverage to corporations from Internet-based risks, and more generally from risks relating to information technology infrastructure, information privacy, information governance liability, and activities related thereto. Other types All-risk insurance is an insurance that covers a wide range of incidents and perils, except those noted in the policy. All-risk insurance is different from peril-specific insurance that cover losses from only those perils listed in the policy. In car insurance, all-risk policy includes also the damages caused by the own driver. Bloodstock insurance covers individual horses or a number of horses under common ownership. Coverage is typically for mortality as a result of accident, illness or disease but may extend to include infertility, in-transit loss, veterinary fees, and prospective foal. Business interruption insurance covers the loss of income, and the expenses incurred, after a covered peril interrupts normal business operations. Defense Base Act insurance provides coverage for civilian workers hired by the government to perform contracts outside the United States and Canada. DBA is required for all U.S. citizens, U.S. residents, U.S. Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, foreign nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits. Expatriate insurance provides individuals and organizations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits. Hired-in Plant Insurance covers liability where, under a contract of hire, the customer is liable to pay for the cost of hired-in equipment and for any rental charges due to a plant hire firm, such as construction plant and machinery. Legal expenses insurance covers policyholders for the potential costs of legal action against an institution or an individual. When something happens which triggers the need for legal action, it is known as "the event". There are two main types of legal expenses insurance: before the event insurance and after the event insurance. Livestock insurance is a specialist policy provided to, for example, commercial or hobby farms, aquariums, fish farms or any other animal holding. Cover is available for mortality or economic slaughter as a result of accident, illness or disease but can extend to include destruction by government order. Media liability insurance is designed to cover professionals that engage in film and television production and print, against risks such as defamation. Nuclear incident insurance covers damages resulting from an incident involving radioactive materials and is generally arranged at the national level. Pet insurance insures pets against accidents and illnesses; some companies cover routine/wellness care and burial, as well. Pollution insurance usually takes the form of first-party coverage for contamination of insured property either by external or on-site sources. Coverage is also afforded for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of hazardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically excluded. Purchase insurance is aimed at providing protection on the products people purchase. Purchase insurance can cover individual purchase protection, warranties, guarantees, care plans and even mobile phone insurance. Such insurance is normally very limited in the scope of problems that are covered by the policy. Tax insurance is increasingly being used in corporate transactions to protect taxpayers in the event that a tax position it has taken is challenged by the IRS or a state, local, or foreign taxing authority Title insurance provides a guarantee that title to real property is vested in the purchaser or mortgagee, free and clear of liens or encumbrances. It is usually issued in conjunction with a search of the public records performed at the time of a real estate transaction. Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, loss of personal belongings, travel delay, and personal liabilities. Tuition insurance insures students against involuntary withdrawal from cost-intensive educational institutions Interest rate insurance protects the holder from adverse changes in interest rates, for instance for those with a variable rate loan or mortgage Divorce insurance is a form of contractual liability insurance that pays the insured a cash benefit if their marriage ends in divorce. Insurance financing vehicles Fraternal insurance is provided on a cooperative basis by fraternal benefit societies or other social organizations. No-fault insurance is a type of insurance policy where insureds are indemnified by their own insurer regardless of fault in the incident. Protected self-insurance is an alternative risk financing mechanism in which an organization retains the mathematically calculated cost of risk within the organization and transfers the catastrophic risk with specific and aggregate limits to an insurer so the maximum total cost of the program is known. A properly designed and underwritten Protected Self-Insurance Program reduces and stabilizes the cost of insurance and provides valuable risk management information. Retrospectively rated insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured's actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year's premium is based partially on the current year's losses, although the premium adjustments may take months or years beyond the current year's expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use. Formal self-insurance is the deliberate decision to pay for otherwise insurable losses out of one's own money. This can be done on a formal basis by establishing a separate fund into which funds are deposited on a periodic basis, or by simply forgoing the purchase of available insurance and paying out-of-pocket. Self-insurance is usually used to pay for high-frequency, low-severity losses. Such losses, if covered by conventional insurance, mean having to pay a premium that includes loadings for the company's general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies. While this is true for all insurance, for small, frequent losses the transaction costs may exceed the benefit of volatility reduction that insurance otherwise affords. Insurance companies Insurance companies may sell any combination of insurance types, but are often classified into three groups: Life insurance companies, which sell life insurance, annuities and pensions products and bear similarities to asset management businesses Mutual companies are owned by the policyholders, while shareholders own proprietary insurance companies. Demutualization of mutual insurers to form stock companies, as well as the formation of a hybrid known as a mutual holding company, became common in some countries, such as the United States, in the late 20th century. However, not all states permit mutual holding companies. Reinsurance companies Reinsurance companies are insurance companies that sell policies to other insurance companies, allowing them to reduce their risks and protect themselves from substantial losses. The reinsurance market is dominated by a few very large companies, with huge reserves. A reinsurer may also be a direct writer of insurance risks as well. Captive insurance companies Captive insurance companies may be defined as limited-purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. This definition can sometimes be extended to include some of the risks of the parent company's customers. In short, it is an in-house self-insurance vehicle. Captives may take the form of a "pure" entity, which is a 100% subsidiary of the self-insured parent company; of a "mutual" captive, which insures the collective risks of members of an industr); and of an "association" captive, which self-insures individual risks of the members of a professional, commercial or industrial association. Captives represent commercial, economic and tax advantages to their sponsors because of the reductions in costs they help create and for the ease of insurance risk management and the flexibility for cash flows they generate. Additionally, they may provide coverage of risks which is neither available nor offered in the traditional insurance market at reasonable prices. The types of risk that a captive can underwrite for their parents include property damage, public and product liability, professional indemnity, employee benefits, employers' liability, motor and medical aid expenses. The captive's exposure to such risks may be limited by the use of reinsurance. Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background: Heavy and increasing premium costs in almost every line of coverage Difficulties in insuring certain types of fortuitous risk Differential coverage standards in various parts of the world Rating structures which reflect market trends rather than individual loss experience Insufficient credit for deductibles or loss control efforts Other forms Other possible forms for an insurance company include reciprocals, in which policyholders reciprocate in sharing risks, and Lloyd's organizations. Admitted versus non-admitted Admitted insurance companies are those in the United States that have been admitted or licensed by the state licensing agency. The insurance they sell is called admitted insurance. Non-admitted companies have not been approved by the state licensing agency, but are allowed to sell insurance under special circumstances when they meet an insurance need that admitted companies cannot or will not meet. Insurance consultants There are also companies known as "insurance consultants". Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy among many companies. Similar to an insurance consultant, an "insurance broker" also shops around for the best insurance policy among many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client. Neither insurance consultants nor insurance brokers are insurance companies and no risks are transferred to them in insurance transactions. Third party administrators are companies that perform underwriting and sometimes claims handling services for insurance companies. These companies often have special expertise that the insurance companies do not have. Financial stability and rating The financial stability and strength of an insurance company should be a major consideration when buying an insurance contract. An insurance premium paid currently provides coverage for losses that might arise many years in the future. For that reason, the viability of the insurance carrier is very important. In recent years, a number of insurance companies have become insolvent, leaving their policyholders with no coverage. A number of independent rating agencies provide information and rate the financial viability of insurance companies. Insurance companies are rated by various agencies such as A. M. Best. The ratings include the company's financial strength, which measures its ability to pay claims. It also rates financial instruments issued by the insurance company, such as bonds, notes, and securitization products. Across the world Advanced economies account for the bulk of the global insurance industry. According to Swiss Re, the global insurance market wrote $6.287 trillion in direct premiums in 2020. As usual, the United States was the country with the largest insurance market with $2.530 trillion of direct premiums written, with the People's Republic of China coming in second at only $574 billion, Japan coming in third at $438 billion, and the United Kingdom coming in fourth at $380 billion. The National Conference of Insurance Legislators also works to harmonize the different state laws. In the European Union, the Third Non-Life Directive and the Third Life Directive, both passed in 1992 and effective 1994, created a single insurance market in Europe and allowed insurance companies to offer insurance anywhere in the EU and allowed insurance consumers to purchase insurance from any insurer in the EU. As far as insurance in the United Kingdom, the Financial Services Authority took over insurance regulation from the General Insurance Standards Council in 2005; laws passed include the Insurance Companies Act 1973 and another in 1982, and reforms to warranty and other aspects under discussion. The insurance industry in China was nationalized in 1949 and thereafter offered by only a single state-owned company, the People's Insurance Company of China, which was eventually suspended as demand declined in a communist environment. In 1978, market reforms led to an increase in the market and by 1995 a comprehensive Insurance Law of the People's Republic of China was passed, followed in 1998 by the formation of China Insurance Regulatory Commission, which has broad regulatory authority over the insurance market of China. In India IRDA is insurance regulatory authority. As per the section 4 of IRDA Act 1999, Insurance Regulatory and Development Authority, which was constituted by an act of parliament. National Insurance Academy, Pune is apex insurance capacity builder institute promoted with support from Ministry of Finance and by LIC, Life & General Insurance companies. In 2017, within the framework of the joint project of the Bank of Russia and Yandex, a special check mark text box) appeared in the search for Yandex system, informing the consumer that the company's financial services are offered on the marked website, which has the status of an insurance company, a broker or a mutual insurance association. Controversies Does not reduce the risk Insurance is just a risk transfer mechanism wherein the financial burden which may arise due to some fortuitous event is transferred to a bigger entity called an Insurance Company by way of paying premiums. This only reduces the financial burden and not the actual chances of happening of an event. Insurance is a risk for both the insurance company and the insured. The insurance company understands the risk involved and will perform a risk assessment when writing the policy. As a result, the premiums may go up if they determine that the policyholder will file a claim. However, premiums might reduce if the policyholder commits to a risk management program as recommended by the insurer. It's therefore important that insurers view risk management as a joint initiative between policyholder and insurer since a robust risk management plan minimizes the possibility of a large claim for the insurer while stabilizing or reducing premiums for the policyholder. If a person is financially stable and plans for life's unexpected events, they may be able to go without insurance. However, they must have enough to cover a total and complete loss of employment and of their possessions. Some states will accept a surety bond, a government bond, or even making a cash deposit with the state. Moral hazard An insurance company may inadvertently find that its insureds may not be as risk-averse as they might otherwise be, a concept known as moral hazard. This 'insulates' many from the true costs of living with risk, negating measures that can mitigate or adapt to risk and leading some to describe insurance schemes as potentially maladaptive. Complexity of insurance policy contracts Insurance policies can be complex and some policyholders may not understand all the fees and coverages included in a policy. As a result, people may buy policies on unfavorable terms. In response to these issues, many countries have enacted detailed statutory and regulatory regimes governing every aspect of the insurance business, including minimum standards for policies and the ways in which they may be advertised and sold. For example, most insurance policies in the English language today have been carefully drafted in plain English; the industry learned the hard way that many courts will not enforce policies against insureds when the judges themselves cannot understand what the policies are saying. Typically, courts construe ambiguities in insurance policies against the insurance company and in favor of coverage under the policy. Many institutional insurance purchasers buy insurance through an insurance broker. While on the surface it appears the broker represents the buyer, and typically counsels the buyer on appropriate coverage and policy limitations, in the vast majority of cases a broker's compensation comes in the form of a commission as a percentage of the insurance premium, creating a conflict of interest in that the broker's financial interest is tilted towards encouraging an insured to purchase more insurance than might be necessary at a higher price. A broker generally holds contracts with many insurers, thereby allowing the broker to "shop" the market for the best rates and coverage possible. Insurance may also be purchased through an agent. A tied agent, working exclusively with one insurer, represents the insurance company from whom the policyholder buys. Just as there is a potential conflict of interest with a broker, an agent has a different type of conflict. Because agents work directly for the insurance company, if there is a claim the agent may advise the client to the benefit of the insurance company. Agents generally cannot offer as broad a range of selection compared to an insurance broker. An independent insurance consultant advises insureds on a fee-for-service retainer, similar to an attorney, and thus offers completely independent advice, free of the financial conflict of interest of brokers or agents. However, such a consultant must still work through brokers or agents in order to secure coverage for their clients. Limited consumer benefits In the United States, economists and consumer advocates generally consider insurance to be worthwhile for low-probability, catastrophic losses, but not for high-probability, small losses. Because of this, consumers are advised to select high deductibles and to not insure losses which would not cause a disruption in their life. However, consumers have shown a tendency to prefer low deductibles and to prefer to insure relatively high-probability, small losses over low-probability, perhaps due to not understanding or ignoring the low-probability risk. This is associated with reduced purchasing of insurance against low-probability losses, and may result in increased inefficiencies from moral hazard. Redlining Redlining is the practice of denying insurance coverage in specific geographic areas, supposedly because of a high likelihood of loss, while the alleged motivation is unlawful discrimination. Racial profiling or redlining has a long history in the property insurance industry in the United States. From a review of industry underwriting and marketing materials, court documents, and research by government agencies, industry and community groups, and academics, it is clear that race has long affected and continues to affect the policies and practices of the insurance industry. In July 2007, the US Federal Trade Commission released a report presenting the results of a study concerning credit-based insurance scores in automobile insurance. The study found that these scores are effective predictors of risk. It also showed that African-Americans and Hispanics are substantially overrepresented in the lowest credit scores, and substantially underrepresented in the highest, while Caucasians and Asians are more evenly spread across the scores. The credit scores were also found to predict risk within each of the ethnic groups, leading the FTC to conclude that the scoring models are not solely proxies for redlining. The FTC indicated little data was available to evaluate benefit of insurance scores to consumers. The report was disputed by representatives of the Consumer Federation of America, the National Fair Housing Alliance, the National Consumer Law Center, and the Center for Economic Justice, for relying on data provided by the insurance industry. All states have provisions in their rate regulation laws or in their fair trade practice acts that prohibit unfair discrimination, often called redlining, in setting rates and making insurance available. In determining premiums and premium rate structures, insurers consider quantifiable factors, including location, credit scores, gender, occupation, marital status, and education level. However, the use of such factors is often considered to be unfair or unlawfully discriminatory, and the reaction against this practice has in some instances led to political disputes about the ways in which insurers determine premiums and regulatory intervention to limit the factors used. An insurance underwriter's job is to evaluate a given risk as to the likelihood that a loss will occur. Any factor that causes a greater likelihood of loss should theoretically be charged a higher rate. This basic principle of insurance must be followed if insurance companies are to remain solvent. Thus, "discrimination" against potential insureds in the risk evaluation and premium-setting process is a necessary by-product of the fundamentals of insurance underwriting. For instance, insurers charge older people significantly higher premiums than they charge younger people for term life insurance. Older people are thus treated differently from younger people. The rationale for the differential treatment goes to the heart of the risk a life insurer takes: older people are likely to die sooner than young people, so the risk of loss is greater in any given period of time and therefore the risk premium must be higher to cover the greater risk. However, treating insureds differently when there is no actuarially sound reason for doing so is unlawful discrimination. Insurance patents New assurance products can now be protected from copying with a business method patent in the United States. A recent example of a new insurance product that is patented is Usage Based auto insurance. Early versions were independently invented and patented by a major US auto insurance company, Progressive Auto Insurance and a Spanish independent inventor, Salvador Minguijon Perez. Many independent inventors are in favor of patenting new insurance products since it gives them protection from big companies when they bring their new insurance products to market. Independent inventors account for 70% of the new U.S. patent applications in this area. Many insurance executives are opposed to patenting insurance products because it creates a new risk for them. The Hartford insurance company, for example, recently had to pay $80 million to an independent inventor, Bancorp Services, in order to settle a patent infringement and theft of trade secret lawsuit for a type of corporate owned life insurance product invented and patented by Bancorp. There are currently about 150 new patent applications on insurance inventions filed per year in the United States. The rate at which patents have been issued has steadily risen from 15 in 2002 to 44 in 2006. The first insurance patent to be granted was including another example of an application posted was. It was posted on 6 March 2009. This patent application describes a method for increasing the ease of changing insurance companies. Insurance on demand Insurance on demand is an insurance service that provides clients with insurance protection when they need, i.e. only episodic rather than on 24/7 basis as typically provided by traditional insurers. Insurance industry and rent-seeking Certain insurance products and practices have been described as rent-seeking by critics. That is, some insurance products or practices are useful primarily because of legal benefits, such as reducing taxes, as opposed to providing protection against risks of adverse events. Under United States tax law, for example, most owners of variable annuities and variable life insurance can invest their premium payments in the stock market and defer or eliminate paying any taxes on their investments until withdrawals are made. Sometimes this tax deferral is the only reason people use these products. Another example is the legal infrastructure which allows life insurance to be held in an irrevocable trust which is used to pay an estate tax while the proceeds themselves are immune from the estate tax. Religious concerns Muslim scholars have varying opinions about life insurance. Life insurance policies that earn interest are generally considered to be a form of riba and some consider even policies that do not earn interest to be a form of gharar. Some argue that gharar is not present due to the actuarial science behind the underwriting. Jewish rabbinical scholars also have expressed reservations regarding insurance as an avoidance of God's will but most find it acceptable in moderation. Some Christians believe insurance represents a lack of faith and there is a long history of resistance to commercial insurance in Anabaptist communities but many participate in community-based self-insurance programs that spread risk within their communities.

x̄ - > Standard normal distribution

The term "standard normal", which denotes the normal distribution with zero mean and unit variance came into general use around the 1950s, appearing in the popular textbooks by P. G. Hoel "Introduction to mathematical statistics" and A. M. Mood "Introduction to the theory of statistics". In popular culture, The concept of a normal distribution is widespread in popular culture and its application can be observed in a number of common situations. For example, asking a group of people to vote over a range of orders, numerical values will typically result in a normal distribution. See also Bates distribution – similar to the Irwin–Hall distribution, but rescaled back into the 0 to 1 range Behrens–Fisher problem – the long-standing problem of testing whether two normal samples with different variances have the same means; Bhattacharyya distance – the method used to separate mixtures of normal distributions Erdős–Kac theorem – on the occurrence of the normal distribution in number theory Full width at half maximum Gaussian blur – convolution, which uses the normal distribution as a kernel Modified half-normal distribution Normally distributed and uncorrelated does not imply independent Ratio normal distribution Reciprocal normal distribution Standard normal table Stein's lemma Sub-Gaussian distribution Sum of normally distributed random variables Tweedie distribution – The normal distribution is a member of the family of Tweedie exponential dispersion models. Wrapped normal distribution – the Normal distribution applied to a circular domain Z-distribution – a special case of the normal distribution with a mean of 0 and standard deviation of 1 Z-test – using the normal distribution

In mathematics, the logarithm is the inverse function of exponentiation. That means the logarithm of a given number is the exponent to which another fixed number, the base must be raised, to produce that number. In the simplest case, the logarithm counts the number of occurrences of the same factor in repeated multiplication; e.g. since the "logarithm base 10" of 1000 is 3, or. The logarithm of to base is denoted as or without parentheses, or even without the explicit base, when no confusion is possible, or when the base does not matter such as in big O notation. The logarithm base is called the decimal or common logarithm and is commonly used in science and engineering. The natural logarithm has the number as its base; its use is widespread in mathematics and physics, because of its simpler integral and derivative. The binary logarithm uses base and is frequently used in computer science. Logarithms were introduced by John Napier in 1614 as a means of simplifying calculations. They were rapidly adopted by navigators, scientists, engineers, surveyors, and others to perform high-accuracy computations more easily. Using logarithm tables, tedious multi-digit multiplication steps can be replaced by table look-ups and simpler addition. This is possible because of the fact—important in its own right—that the logarithm of a product is the sum of the logarithms of the factors: provided that and are all positive. The slide rule, also based on logarithms, allows quick calculations without tables, but at a lower precision. The present-day notion of logarithms comes from Leonhard Euler, who connected them to the exponential function in the 18th century, and who also introduced the letter as the base of natural logarithms. Logarithmic scales reduce wide-ranging quantities to smaller scopes. For example, a decibel is a unit used to express ratios as logarithms, mostly for signal power and amplitude. In chemistry, pH is a logarithmic measure for the acidity of an aqueous solution. Logarithms are commonplace in scientific formulae, and in measurements of the complexity of algorithms and geometric objects called fractals. They help to describe frequency ratios of musical intervals, appear in formulas counting prime numbers or approximating factorials, inform some models in psychophysics, and can aid in forensic accounting. The concept of the logarithm is the inverse of exponentiation and extends to other mathematical structures as well. However, in general settings, the logarithm tends to be a multi-valued function. For example, the complex logarithm is the multi-valued inverse of the complex exponential function. Similarly, the discrete logarithm is the multi-valued inverse of the exponential function infinite groups; it has uses in public-key cryptography. Motivation Addition, multiplication, and exponentiation are three of the most fundamental arithmetic operations. The inverse of addition is subtraction, and the inverse of multiplication is division. Similarly, a logarithm is the inverse operation of exponentiation. Exponentiation is when a number the base is raised to a certain power the exponent for giving a value this denoted, For example, raising to the power of gives: 2^3 8 The logarithm of the base is the inverse operation, that provides the output from the input. That is, y \log_b x is equivalent to x b^y if is a positive real number. One of the main historical motivations for introducing logarithms is the formula

x̄ - > Conditional Probability and Joint probability distribution

 In probability theory and statistics, given two jointly distributed random variables X and Y, the conditional probability distribution of Y given X is the probability distribution of Y when X is known to be a particular value; in some cases, the conditional probabilities may be expressed as functions containing the unspecified value x of X as a parameter. When both X and Y are categorical variables, a conditional probability table is typically used to represent the conditional probability. The conditional distribution contrasts with the marginal distribution of a random variable, which is its distribution without reference to the value of the other variable. If the conditional distribution of Y given X is a continuous distribution, then its probability density function is known as the conditional density function. The properties of a conditional distribution, such as the moments, are often referred to by corresponding names such as the conditional mean and conditional variance. More generally, one can refer to the conditional distribution of a subset of a set of more than two variables; this conditional distribution is contingent on the values of all the remaining variables, and if more than one variable is included in the subset then this conditional distribution is the conditional joint distribution of the included variables. Conditional discrete distributions For discrete random variables, the conditional probability mass function of Y given X x can be written according to its definition as: is a version of the conditional expectation of the indicator function for A: An expectation of a random variable with respect to a regular conditional probability is equal to its conditional expectation.

Given two random variables that are defined on the same probability space, the joint probability distribution is the corresponding probability distribution on all possible pairs of outputs. The joint distribution can just as well be considered for any given number of random variables. The joint distribution encodes the marginal distributions, i.e. the distributions of each of the individual random variables. It also encodes the conditional probability distributions, which deal with how the outputs of one random variable are distributed when given information on the outputs of the other random variable. In the formal mathematical setup of measure theory, the joint distribution is given by the pushforward measure, by the map obtained by pairing together the given random variables, of the sample space's probability measure. In the case of real-valued random variables, the joint distribution, as a particular multivariate distribution, may be expressed by a multivariate cumulative distribution function, or by a multivariate probability density function together with a multivariate probability mass function. In the special case of continuous random variables, it is sufficient to consider probability density functions, and in the case of discrete random variables, it is sufficient to consider probability mass functions. Examples Draw from an urn Suppose each of two urns contains twice as many red balls as blue balls, and no others, and suppose one ball is randomly selected from each urn, with the two draws independent of each other. Let A and B be discrete random variables associated with the outcomes of the draw from the first urn and second urn respectively. The probability of drawing a red ball from either of the urns is 2/3, and the probability of drawing a blue ball is 1/3. The joint probability distribution is presented in the following table: Each of the four inner cells shows the probability of a particular combination of results from the two draws; these probabilities are the joint distribution. In any one cell, the probability of a particular combination occurring is the product of the probability of the specified result for A and the probability of the specified result for B. The probabilities in these four cells sum to 1, as is always true for probability distributions. Moreover, the final row and the final column give the marginal probability distribution for A and the marginal probability distribution for B respectively. For example, for A the first of these cells gives the sum of the probabilities for A being red, regardless of which possibility for B in the column above the cell occurs, like 2/3. Thus the marginal probability distribution for A gives A's probabilities unconditional on B, in a margin of the table. Coin flips Consider the flip of two fair coins; let A and B be discrete random variables associated with the outcomes of the first and second coin flips respectively. Each coin flip is a Bernoulli trial and has a Bernoulli distribution. If a coin displays "heads" then the associated random variable takes the value 1, and it takes the value 0 otherwise. The probability of each of these outcomes is 1/2, so the marginal density functions are The joint probability mass function of A and B defining probabilities for each pair of outcomes. All possible outcomes are,,,. Since each outcome is equally likely the joint probability mass function becomes Since the coin flips are independent, the joint probability mass function is the product of the marginals: Rolling a dice Consider the role of a fair and let A 1 if the number is even and A 0 otherwise. Furthermore, let B 1 if the number is prime and B 0 otherwise. Important named distributions Named joint distributions that arise frequently in statistics include the multivariate normal distribution, the multivariate stable distribution, the multinomial distribution, the negative multinomial distribution, the multivariate hypergeometric distribution, and the elliptical distribution. See also Bayesian programming Chow–Liu tree Conditional probability Copula Disintegration theorem Multivariate statistics Statistical interference Pairwise independent distribution References External links A modern introduction to probability and statistics: understanding why and how. Dekking, Michel, 1946-. London: Springer. 2005.. OCLC 262680588.

x̄ - > probability theory and statistics

In probability theory and statistics, a probability distribution is a mathematical function that gives the probabilities of the occurrence of different possible outcomes for an experiment. It is a mathematical description of a random phenomenon in terms of its sample space and the probabilities of events. For instance, if it is used to denote the outcome of a coin toss, then the probability distribution would take the values 0.5 for and 0.5 for. Examples of random phenomena include the weather conditions at some future date, the height of a randomly selected person, the fraction of male students in a school, the results of a survey to be conducted, etc. General definition A probability distribution can be described in various forms, such as by a probability mass function or a cumulative distribution function. One of the most general descriptions, which applies to absolutely continuous and discrete variables, is by means of a probability function P\colon \mathcal \int_a^b d x\, \Psi ^2, the probability that the particle's position will be in the interval in dimension one, and a similar triple integral in dimension three. This is a key principle of quantum mechanics. Probabilistic load flow in the power-flow study explains the uncertainties of input variables as a probability distribution and provides the power flow calculation also in terms of a probability distribution. Prediction of natural phenomena occurrences based on previous frequency distributions such as tropical cyclones, hail, time in between events, etc. 

See also Conditional probability distribution 

Joint probability distribution 

 Quasiprobability distribution 

 Empirical probability distribution 

 Histogram Riemann–Stieltjes integral application to probability theory list

 List of probability distributions 

 List of statistical topics

x̄ - > Poultry feed

Poultry feed is food for farm poultry, including chickens, ducks, geese, and other domestic birds. Before the twentieth century, poultry was mostly kept on general farms, and foraged for much of their feed, eating insects, grain spilled by cattle and horses, and plants around the farm. This was often supplemented by grain, household scraps, calcium supplements such as oyster shells, and garden waste.

As farming became more specialized, many farms kept flocks too large to be fed in this way, and nutritionally complete poultry feed was developed. Modern feeds for poultry consist largely of grain, protein supplements such as soybean oil meal, mineral supplements, and vitamin supplements. The quantity of feed, and the nutritional requirements of the feed, depending on the weight and age of the poultry, their rate of growth, their rate of egg production, the weather, and the amount of nutrition the poultry obtain from foraging. This results in a wide variety of feed formulations. The substitution of less expensive local ingredients introduces additional variations.

Healthy poultry requires a sufficient amount of protein and carbohydrates, along with the necessary vitamins, dietary minerals, and an adequate supply of water. Lactose fermentation of feed can aid in supplying vitamins and minerals to poultry. Egg-laying hens require 4 grams per day of calcium of which 2 grams are used in the egg. Oyster shells are often used as a source of dietary calcium. Certain diets also require the use of grit, tiny rocks such as pieces of granite, in the feed. Grit aids in digestion by grinding food as it passes through the gizzard. Grit is not needed if the commercial feed is used. Diseases can be avoided with proper maintenance of the feed and feeder. A feeder is a device that supplies feed to poultry. For privately raised chickens or chickens as pets, the feed can be delivered through jars, troughs, or tube feeders. The use of poultry feed can also be supplemented with food found through foraging. In industrial agriculture, machinery is used to automate the feeding process, reducing the cost and increasing the scale of farming. For commercial poultry farming, feed serves as the largest cost of the operation.

Poultry Feed Terms Mash refers to nutritionally complete poultry in a ground form. This is the earliest complete poultry ration. Pellets consist of a mash that has been pelletized; that is, compressed and molded into pellets in a pellet mill. Unlike mash, where the ingredients can separate in shipment and the poultry can pick and choose among the ingredients, the ingredients in a single pellet stay together, and the poultry eats the pellets whole. Pellets are often too large for newly hatched poultry. Crumbles are pellets that have been sent through rollers to break them into granules. This is often used for chick feed. The scratch grain consists of one or more varieties of whole, cracked, or rolled grains. Unlike other feeds, which are fed in troughs, hoppers, or tube feeders, scratch grains are often scattered on the ground. Hence, a large particle size is desired. Because they consist only of grains, scratch grains are not a complete ration and are used to supplement the balanced ration.

x̄ - > Econometrics

 Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference". An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships". Jan Tinbergen is one of the two founding fathers of econometrics. The other, Ragnar Frisch, also coined the term in the sense in which it is used today. A basic tool for econometrics is the multiple linear regression model. Econometricians try to find estimators that have desirable statistical properties including unbiasedness, efficiency, and consistency. Applied econometrics uses theoretical econometrics and real-world data for assessing economic theories, developing econometric models, analyzing economic history, and forecasting. Basic models: linear regression A basic tool for econometrics is the multiple linear regression model. Estimating a linear regression on two variables can be visualized as fitting a line through data points representing paired values of the independent and dependent variables. For example, consider Okun's law, which relates GDP growth to the unemployment rate. This relationship is represented in a linear regression where the change in the unemployment rate is a function of an intercept, a given value of GDP growth multiplied by a slope coefficient \beta_1 and an error term, \varepsilon:

The unknown parameters \beta_0 and \beta_1 can be estimated. Here \beta_0 is estimated to be 0.83 and \beta_1 is estimated to be -1.77. This means that if GDP growth increased by one percentage point, the unemployment rate would be predicted to drop by 1.77 1 points, other things held constant. The model could then be tested for statistical significance as to whether an increase in GDP growth is associated with a decrease in unemployment, as hypothesized. If the estimate of \beta_1 were not significantly different from 0, the test would fail to find evidence that changes in the growth rate and unemployment rate were related. The variance in a prediction of the dependent variable as a function of the independent variable is given in polynomial least squares. Theory Econometric theory uses statistical theory and mathematical statistics to evaluate and develop econometric methods. Econometrics may use standard statistical models to study economic questions, but most often they are with observational data, rather than in controlled experiments. In this, the design of observational studies in econometrics is similar to the design of studies in other observational disciplines, such as astronomy, epidemiology, sociology, and political science. Analysis of data from an observational study is guided by the study protocol, although exploratory data analysis may be useful for generating new hypotheses. Economics often analyses systems of equations and inequalities, such as supply and demand hypothesized to be in equilibrium. Consequently, the field of econometrics has developed methods for the identification and estimation of simultaneous equation models. These methods are analogous to methods used in other areas of science, such as the field of system identification in systems analysis and control theory. Such methods may allow researchers to estimate models and investigate their empirical consequences, without directly manipulating the system.

One of the fundamental statistical methods used by econometricians is regression analysis. Regression methods are important in econometrics because economists typically cannot use controlled experiments. Econometricians often seek illuminating natural experiments in the absence of evidence from controlled experiments. Observational data may be subject to omitted-variable bias and a list of other problems that must be addressed using causal analysis of simultaneous-equation models. In addition to natural experiments, quasi-experimental methods have been used increasingly commonly by econometricians since the 1980s, in order to credibly identify causal effects. Example A simple example of a relationship in econometrics from the field of labor economics is: This example assumes that the natural logarithm of a person's wage is a linear function of the number of years of education that person has acquired. The parameter \beta_1 measures the increase in the natural log of the wage attributable to one more year of education. The term \varepsilon is a random variable representing all other factors that may have a direct influence on wage. The econometric goal is to estimate the parameters, \beta_0 \mbox \beta_1 under specific assumptions about the random variable \varepsilon. For example, if \varepsilon is uncorrelated with years of education, then the equation can be estimated with ordinary least squares. If the researcher could randomly assign people to different levels of education, the data set thus generated would allow estimation of the effect of changes in years of education on wages. In reality, those experiments cannot be conducted. Instead, the econometrician observes the years of education and the wages paid to people who differ along many dimensions. Given this kind of data, the estimated coefficient on Years of Education in the equation above reflects both the effect of education on wages and the effect of other variables on wages, if those other variables were correlated with education. For example, people born in certain places may have higher wages and higher levels of education. Unless the econometrician controls for a place of birth in the above equation, the effect of birthplace on wages may be falsely attributed to the effect of education on wages. The most obvious way to control birthplace is to include a measure of the effect of birthplace in the equation above. Exclusion of birthplace, together with the assumption that \epsilon is uncorrelated with education produces a misspecified model. Another technique is to include in the equation an additional set of measured covariates which are not instrumental variables, yet render \beta_1 identifiable. An overview of econometric methods used to study this problem was provided by Card. Journals

The main journals that publish work in econometrics are Econometrica, the Journal of Econometrics, The Review of Economics and Statistics, Econometric Theory, the Journal of Applied Econometrics, Econometric Reviews, The Econometrics Journal, and the Journal of Business & Economic Statistics. Limitations and criticisms Like other forms of statistical analysis, badly specified econometric models may show a spurious relationship where two variables are correlated but causally unrelated. In a study of the use of econometrics in major economics journals, McCloskey concluded that some economists report p-values and neglect concerns of type II errors; some economists fail to report estimates of the size of effects and to discuss their economic importance. She also argues that some economists also fail to use economic reasoning for model selection, especially for deciding which variables to include in a regression. In some cases, economic variables cannot be experimentally manipulated as treatments randomly assigned to subjects. In such cases, economists rely on observational studies, often using data sets with many strongly associated covariates, resulting in enormous numbers of models with similar explanatory abilities but different covariates and regression estimates. Regarding the plurality of models compatible with observational data sets, Edward Leamer urged that "professionals... properly withhold belief until an inference can be shown to be adequately insensitive to the choice of assumptions".