| Course | GF591 Individual Insurance Planning |
|---|---|
| Unit | Unit 2 |
| Paper type | Exposure inventory |
| Length | About 790 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | MS in Finance |
| Updated | October 2026 |
Free sample paper for GF591 Unit 2
Seventeen Exposures, Four Treatments: A Unit 2 Exposure Inventory for a Practice-Owning Household
[Student Name]
Purdue University Global
GF591: Individual Insurance Planning
Unit 2 Exposure Inventory
[Instructor Name]
[Date]
The household, its incomes, assets, coverage and premiums are composite and illustrative; the sources cited are real.
Household Profile
She is 44 and earns $285,000 a year from her practice. He is 46 and earns $124,000. They own a home worth about $690,000 with a $412,000 mortgage and a one-bedroom condo, owned outright, that they rent to a long-term tenant. Cash reserves are $64,000, a brokerage account holds $180,000 and the children's 529 plans hold $102,000.
Existing coverage: a $1,000,000 term policy on her with ten years left, a $5,000 monthly individual disability policy she bought in residency, his group life of $248,000 and a university disability plan replacing three fifths of his salary, auto liability on the common 100/300 split, $300,000 of home liability, and a landlord policy on the condo. The profile fixes these facts for every later unit.
The Inventory, in Order of Severity
Each line gives the exposure, its worst plausible loss, its likely frequency, the treatment and the reason.
1. Her disability. Worst loss: $5,985,000 of gross earnings to age 65. Frequency: low but real over 21 years. Treatment: transfer. Her $5,000 benefit replaces about a fifth of her pay.
2. His disability. Worst loss: $2,604,000 to age 67. Frequency: low. Treatment: transfer, already largely done through group coverage; review if he changes jobs.
3. Liability above current limits. Worst loss: a judgment reaching their $864,000 of exposed assets. Frequency: low, rising when the 15-year-old drives. Treatment: transfer through an umbrella.
4. Her death. Worst loss: the household's largest income and her retirement contributions. Treatment: transfer; the size is set in Unit 3.
5. His death. Treatment: transfer, sized later, with group life set aside because it ends with his job.
6. Total loss of the home. Worst loss: rebuild cost. Treatment: transfer at full replacement cost.
7. Professional liability in her practice. Treatment: transfer through the practice's malpractice policy, outside this household inventory.
8. Long-term care. Treatment: retain for now; review at 55, when premiums and need can be weighed together.
9. Tenant or guest injury at the condo. Treatment: transfer through the landlord policy and the umbrella.
10. Damage to the condo. Treatment: transfer through the landlord policy.
11. Teen driver collisions. Treatment: reduce through a telematics program for the first year of driving.
12. Water damage inside the home. Treatment: reduce with an automatic water shutoff valve.
13. Fire and break-in. Treatment: reduce with a monitored alarm, which also lowers the premium.
14. Identity theft. Treatment: reduce with credit freezes for all four family members.
15. Small auto damage. Treatment: retain through higher deductibles.
16. Small home claims. Treatment: retain through a higher deductible.
17. Equipment lease guarantee and nightly condo rental. Treatment: avoid both, explained below.
Treatment follows severity first and frequency second: a loss the household could never absorb is transferred even if it is unlikely, while frequent small losses are kept because insuring them costs more than they do.
The Retention Ceiling
The household will retain any single loss up to $6,400, a tenth of its $64,000 reserve. Below that amount, insurance mainly trades a known premium for a small, survivable cost. Studies of homeowners' deductible choices show that many people pay far more for low deductibles than the expected savings justify (Sydnor, 2010).
Deductible Schedule
1. Collision on both cars, $500 to $2,000. Saves about $412 a year. If both cars had a claim in the same year, the household would pay $3,000 more, so the change repays itself in about 7.3 claim-free years.
2. Homeowners, $1,000 to $5,000. Saves about $640 a year. The extra $4,000 of retention is repaid in 6.25 claim-free years.
Both new deductibles sit under the $6,400 ceiling.
Exposures Avoided
Her associate has asked her to guarantee personally an equipment lease of about $150,000. A personal guarantee would put household assets behind a business debt, so it is declined; the practice can guarantee it instead. The couple also considered renting the condo nightly. Short-term rental brings frequent guests, liability that many landlord policies exclude and local permit rules, so it is avoided.
Exposures Considered and Set Aside
Pet liability (no pet), boat and recreational vehicle liability (none owned) and travel medical coverage (covered by their health plan abroad) were reviewed and dropped. Disability is placed first because the loss of earning power is often the largest financial risk a working household faces, and research on disabled workers shows deep and lasting income losses (Meyer & Mok, 2019). The general method follows standard risk management practice: identify, measure, then treat (Rejda et al., 2020).
References
Meyer, B. D., & Mok, W. K. (2019). Disability, earnings, income and consumption. Journal of Public Economics, 171, 51-69. https://doi.org/10.1016/j.jpubeco.2018.06.011
Rejda, G. E., McNamara, M. J., & Rabel, W. H. (2020). Principles of risk management and insurance (14th ed.). Pearson.
Sydnor, J. (2010). (Over)insuring modest risks. American Economic Journal: Applied Economics, 2(4), 177-199. https://doi.org/10.1257/app.2.4.177
What the GF591 Unit 2 assignment asks for
The second GF591 unit asks you to list a household's exposures and choose a treatment for each before pricing anything. Start with a short profile that fixes the facts later units will reuse: incomes, assets, debts, existing coverage and reserves. Build an inventory with each exposure's worst plausible loss, its likely frequency, the treatment you choose and one sentence of reasoning tied to this household's capacity. Sort by severity first and frequency second, and say why. Include earnings, since death and disability put them at risk. Set a retention ceiling from liquid reserves and use it to decide what to keep. Price any deductible changes with their break-even years. Explain anything the household should avoid outright. Close with exposures considered and dropped. Cite risk management sources in APA 7.
Inside the GF591 Unit 2 example
A profile fixes ages, incomes, the $412,000 mortgage, the rental condo, existing coverage and the $64,000 reserve. Seventeen numbered exposures follow, from her disability through liability, both deaths, the home, the practice, long-term care, the condo, four reductions such as a telematics program and a water shutoff valve, to small claims retained. The highlighted sentence states the sorting rule. A retention section sets the $6,400 ceiling, citing Sydnor on overpriced low deductibles. A deductible schedule prices collision and homeowners changes. A section explains avoiding a personal guarantee on her associate's equipment lease and nightly condo rentals. A closing section lists pet, boat and travel exposures dropped, citing Meyer and Mok on disability losses and Rejda and colleagues on method.
GF591 Unit 2 rubric: what earns full points
GF591 exposure inventories earn early credit for a profile that later units can rely on and a table that includes every material exposure, earnings among them. The larger share goes to treatments that fit the household's capacity, each with a sentence of reasoning, and to an order that puts severity ahead of frequency. Graders look for a retention ceiling drawn from liquid reserves and applied consistently, so retained items all sit under it. A priced deductible schedule with break-even years shows the inventory was used for decisions. Instructors in the MS in Finance program value avoidance choices explained by their specific risks, and a list of exposures considered and dropped. Rejda and colleagues for the method, Sydnor for deductibles and Meyer and Mok for disability make up the expected sources.
Common GF591 Unit 2 mistakes, and how to avoid them
GF591 Unit 2 inventories often list insurance policies instead of exposures, so uninsured risks never appear. Earnings are left out, even though death and disability threaten them most. Treatments are assigned by habit, such as insuring everything, without reference to what the household could absorb. Tables are sorted by likelihood, which buries the catastrophic losses near the bottom. Retention is described without a figure. Deductible changes appear without break-even years. Avoidance is never used, though some exposures, like personal guarantees, are best declined. If your household is different, perhaps renters, retirees or a single earner, keep the same order: a profile, exposures by severity with loss, frequency, treatment and reason, a retention ceiling, priced deductibles, avoided items and exposures considered and dropped.
Get a GF591 Unit 2 example written to your instructions
Share the household facts from your GF591 Unit 2 case, the treatment labels your course materials use, and the rubric. The inventory you receive ranks exposures by dollar severity, assigns each a treatment with a reason, sets a retention ceiling from the reserve and prices any deductible change. The first custom sample is free, back in 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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GF591 Unit 2 questions, answered
Should the four treatments be avoid, retain, reduce and transfer?
Most sections use those four, sometimes with share or loss control in place of reduce. Use the vocabulary your course materials use and define it once. The sample keeps all four because each one appears in this household: two avoided exposures, four reduced, five retained and six transferred, with the reasoning written beside every row.
How is a retention ceiling chosen?
From liquid reserves rather than from income, since a retained loss is paid in cash the month it happens. The sample uses a tenth of a 64,000 reserve. Other defensible bases include one month of essential spending or a fixed share of liquid assets; whichever you choose, name it and apply it to every retained row in the table.
Do earnings belong in an exposure inventory?
Yes, and they are frequently the largest line. A household's future pay is what death and disability put at risk, and sizing it early gives the life and disability units a figure to start from. The sample totals both spouses' remaining earnings before looking at any policy, which makes the gap in her old disability benefit plain.
Where can I find a free GF591 Unit 2 sample paper?
A complete GF591 Unit 2 exposure inventory is on this page, sorting seventeen exposures for a dentist and engineer household by severity, with treatments, a retention ceiling, a deductible schedule and APA 7 references.
Why decline the personal guarantee on the equipment lease?
A guarantee would put the family's home, savings and investments behind a business debt of about $150,000. Avoiding it costs nothing, since the practice itself can stand behind the lease.