Topic 10 - Dealing With Unexpected Events Flashcards
1
Q
E.g. of unexpected events w pos. impacts
A
- unexpected promotion at work
- win lottery
- win prize draw
2
Q
E.g. of unexpected events w neg. impacts
A
- redundancy
- covid
- car damage (vandalism/accident)
- inc. in rent/mortgage payments
- damage to home from flooding
3
Q
What are insurance policies?
A
- policies designed to protect ppl from financial losses associated w unexpected events
- e.g. fire, theft or accident
4
Q
What are 4 types of insurance policies?
A
- general insurance
- life cover
- health insurance
- pensions policies
5
Q
What does general insurance include?
A
- motor
- buildings
- home contents
- travel
- pet policies
6
Q
What is life cover?
A
- protects other ppl from financial consequences of someone’s death
7
Q
What is health insurance?
A
- protects ppl from financial loss of being too unwell to work
8
Q
What do pension policies do?
A
- enable ppl to save for retirement
9
Q
What is a legal insurance requirement?
A
- motor insurance for car drivers
10
Q
What is a premium?
A
- the price of an insurance policy
11
Q
What are premiums based on?
A
- likelihood of event
- sum insured
- term of policy
- voluntary excess
- how premium is paid (1 payment/monthly instalments)
12
Q
How do insurance companies set a price for the premium?
A
- look at probability of an event happening based on statistics
- inc. premium if more likely
13
Q
What is a no claims discount?
A
- ppl w insurance build up a no claims discount for each yr they don’t make a claim
- also a protected no claims discount
14
Q
What is premium tax?
A
- most general insurance premiums are subject to insurance premium tax
- 10% for most premiums
- 20% for travel insurance - cost of tax is included in policyholders premium
15
Q
Why is providing full info to insurers important?
A
- insurers use info ppl provide to set premium
- if ppl enter misleading info it may make their insurance void + insurer will refuse any claims