L1 Critical & Chronic Illness, Mutual and Proprietary Insurance Flashcards
Critical Illness insurance
pays lump sum benefit when policyholder is diagnosed with a covered illness or condition
CI Condition examples (4)
heart attack, stroke, organ failure, cancer,
Once Benefit is paid what happens to policy? - Critical
Policy expires and no further benefit
Term - Critical
whole life or fixed
Accelerated Benefit Rider - Critical
on life insurance policy, paid from death benefit of life insurance policy. Equal to full or part, expire when all is paid or remaining paid at death.
Premiums - Critical
level and monthly but may cease at certain age
Chronic Illness Insurance
added to life insurance policy as accelerated benefit rider. Pays policy holder a lump sum benefit or annuity upon diagnostic of chronic illness
Chronic illness
insurable illness that prevents policyholder to perform 2 or more Activities of Daily Living (ADL’s)
Mutual Company and example
owned by policyholders and no shareholders example is Wawanesa
Mutual Company and profits
distribute profits to policyholders through dividends or bonuses
Proprietary Insurance (Stock) Company and Example
Owned by shareholders and investors etc Canada Life
Proprietary Insurance (Stock) Company and profit
profit share in predetermined proportion between shareholders and policyholders
Demutualization
transitioning from a mutual insurance company to a proprietary (stock) company by issuing shares or cash to policyholders.
Why Demutualization? (3)
Increase access to capital , clearer company structure and improved efficiency
