Protection - Overview of products Flashcards
1
Q
Outline features of a critical illness policy (8)
A
- Tax free lump sum on diagnosis after survival period
- can be combined with life assurance
- can include free child’s cover
- can get guaranteed premiums
- indexation can be selected
- can include WoP
- can include life cover buy back option
- can be put into a split trust
2
Q
Outline features of an Income Protection policy (10)
A
- Regular tax-free income when unable to work due to accident or illness
- Begins to pay out after deferred period
- Paid until back to work, die, retire or policy ends
- Can include rehabilitation or proportionate benefit
- No limit to amount of claims
- If two claims in quick succession, may not have to wait deferred period
- Benefit limited to 50-60% of income
- Should be done on own occupation basis
- guaranteed premiums can be selected
- automatic waiver of premium included
3
Q
Outline key features of personal accident and sickness insurance (8)
A
- tax-free income if cant work due to illness or sickness
- benefit limited to set % of earnings or max monthly amount
- usually annual contract but can be shorter
- can be cancelled by insurer
- shorter deferred period but only pays out for 1-2 years
- can be standalone or included on home insurance eg
- refunds medical expenses
- can include lump sum payments for loss of limb
4
Q
Outline key features of ASU (7)
A
- tax-free income if cant work due to ASU
- usually annual contract
- max benefit for two years
- has a deferred period
- pre-existing medical conditions excluded
- limited to % of earnings or max monthly amount
- lump sum for loss of limb etc
5
Q
Outline key features of PMI
A
- Covers cost of private treatment
- paid on indemnity basis
- doesnt cover chronic conditions (acute only)
- may need to pay excess
- Basic plan restricted
- mid-range covers more items
- comprehensive plans cover much more (cost is higher)
- treated as benefit in kind if premiums paid by employer
