A&S - SEEWHY VIDEOS Flashcards
(72 cards)
1
Q
Insurance needs pyramid
A
TOP(least important) TO BOTTOM (most important):
- LTC
- CI
- DI
- LI
2
Q
DISABILITY: capitalization of income def + formula
A
def: how much capital req to replace income indefinitely
required annual income / expected investment return
3
Q
DISABILITY: job classifications risk class
A
top(best)…. bottom (worst/hiest risk)?:
4A (BEST): DOCTORS, LAWYERS, DENTISTS, SENIOR EXECUTIVES
3A
2A
A
B (WORST): MANUAL LABOURERS IN HIGH RISK JOBS, I.E CONSTRUCTION WORKERS
4
Q
DISABILITY:Definition of disability (3) for individual policies
A
- Any occupation: worst form of coverage
- regular occ
- own occ (best)
note: definitions can be mixed, i.e own occ for 1 year, then any occ
5
Q
DISABILITY: Any occupation definition of disability
A
disabled if unable to perform their OWN OCC or ANY OTHER OCC suited by education/experience
- ## offered to WORST risk class (B)– i.e construction
6
Q
DISABILITY: Regular occupation definition of disability
A
- similar to own occ
- disabled if unable to do ur regular occ
- can CHOOSE (not forced) to work if diff occ w reduced/eliminated bens.
7
Q
DISABILITY: Own occupation definition of disability
A
- similar to regular occ
- disabled if unable to do ur regular occ
- can CHOOSE (not forced) to work in diff occ, BENEFITS WILL CONTINUE
- Offered to BEST risk class (4A) – i.e doctors, lawyers
8
Q
DISABILITY Occupational clause
A
- if insured switches to riskier job: will adjust premium accordingly (more expensive)
- if switches to less risky job: request downward adjustment (cheaper)
9
Q
DISABILITY Elimination period (waiting period before benefits)
A
- time period insured must be disabled before receiving benefits
- shorter period= higher premium
10
Q
DISABILITY Benefits Period
A
- max time insured will receive benefits while disabled
11
Q
DISABILITY: Renewability options- 3 types
A
- Non canelable– best
- guaranteed renewable
- cancelable —- worst
12
Q
Non cancelable (Non- Can)
A
- Insurer MUST RENEW policy to specific age as long as premium being paid
- cannot change premium, amend benefits, or cancel policy
- offered to BEST risk— 4A (doctors, lawyers)
13
Q
Guaranteed Renewable
A
- insurer CAN ALTER premium if doing so for entire class of policies
14
Q
Cancelable
A
- inurer can cancel or adjust premiums at any time
- wort policy, so offered to worst risk— class B (i.e construction workers)
15
Q
insurable income (for disability coverage)
A
- salary from work
- biz income
- Part time work income
16
Q
UNinsurable income
A
- pension income
- investment income!!!!! (but can reduce amt of coverage)
- trust fund income
17
Q
Waiver of premium
A
- standard in disability policies
- when disabled, insured pays premium for 1st 90 days, afterwards premium waived (and refund premiums colleted)
waivede till:
insured no longer disabled
certain age
certain number of years
18
Q
recurrent disability clause
A
- if insured OFF disability, returns to work and suffers same/related disability withing a time frame (i.e 6 months) ===== continuation of benefits (deduct time already used on previous claim)
- elimination period waived 2nd time and benefits restart right away
19
Q
presumptive disability clause
A
if:
- perm blind
- perm hearing
- loss of 2 limbs incl use of limbs
Assumes disbaled w/o proof
no elimination period
benefits start ASAP
no proof that stopped work
20
Q
Common Exclusions for disability coverage
A
- war/terrorism
- self inflicited wounds/ suicide attempt
- participating in illegal activities
- normal pregnancy/delivery
insurer could also add specific exclusions relevant to insureds health conditions or high risk sports
21
Q
Policy rider
A
an add on options added when policy purchased or adterwards
22
Q
Future Purchase Option (FPO)
A
- Isured can add coverage in stated amounts on stated dates W/O MEDICAL underwriting but subject to FINANCIAL underwriting (need to proove income) + this increases premium
23
Q
Cost of Living Adjustment (COLA)
A
- ADED TO DISABILITY POLICY
- BENEFITS INCREASE YEARLY TO COMBAT INFLATION
- 2 CALCULATION METHODS: SIMPLE METHOD OR COMPOUND METHOD
24
Q
COLA calculation : simple method
A
- benefit oncreases by SAME % annually
25
COLA calculation: Compound Method
- coverage increased by rate of inflation as measured by consumer price index (CPI) up to a max amount
- unused increase (less than max) can be carry fwd to future years
26
Accidental death + Dismemberment (AD+D)
- BENEFIT PAID IF DIES AS RESULT OF ACCIDENT (CAR ACCIDENT, FIRE, ETC) OR IF INSURED DISMEMBERED
- NO MEDICAL UNDERWRITING, BC ITS AN ACCIDENT, NOT HEALTH
- claim does not impact benefits to be received
27
AD+ D exclusions
- self inflicted injuries
- suicide (or attemtped suicide)
- Participation in dangerous sports
- Flying plane (except passengers/ commercial airline)
28
DISABILITY rider: partial and residual benefots
residual benefits: Income related
Partial benefits: job function related
29
DISABILITY residual benefits definition
- paid if: after being totally disabled, no work at all, insured can return to work at reduced capacity, making less then they were before
30
DISABILITY residual benefits calculation 4 steps
1. Income lost
2. % of income lost
3. 80/20 rule
4. end benefit X % inc lost (if 80/20 rule doesnt apply)
31
DISABILITY: residual benefits calculation (how to)
1. Income lost: original monthly income - current monthly income= lost $
2. % of income lost: lost $ / original monthly income= % lost
3. 80/20 rule:
lost more than 80%= full benefits
lost less than 80% ==NO benefits
4. full benefit X % inc lost = % of benefit he will receive
32
DISABILITY partial Benefits
- does not require total disability
| - pyas partial benefit ( i.e 50% of full benefit)
33
DISABILITY Rider: Return of Premium (ROP)
- POLICY HOLDER receives part of premium back (tax free , W/O interest) under certain circumstances
34
DISABILITY RIDERS
- PARTIAL BENEFITS
- RESIDUAL BENEFITS
- RETURN OF PREMIUM (ROP)
35
Critical Illness (CI) Insurance overview
- a living benefit (pays before death if suffer serious illness + SURVIVE)
- pays lump sum if diagnosed w illness covered in policy + SURVIVES # of days (i.e 30)
- can do whatever want w lump sum (medical, vacation, etc...)
36
Critical Illness (CI) details
- stand alone product OR as a rider
- anywhere from 10k-2m
Qualification period: 1st 30 days: any additoonal illness ---> not covered
waiting (survival) period: diagnosed w covered illness + SURVIVE min 30 day (or longer for certain conditions)
so 30 days qualification+ 30 days survival = 60 days
37
CI conditions covered
varies
Big 4:
- heart attck
- stroke
- heart bypass
- life threatening cancer
Memory aid: Hear and stroke foundation + BIG C
also:
10 conditions:
20 conditions:
38
Child CI policy
- benefit is less than adult
- covers same as adults, but also illnesses more associated with kids
- option to convert to adult plan
39
RIDERS FOR CRITICAL ILLNESS POLICY (3-R.W.2)
return of premium (similar to Disability)
waiver of premium (similar to disability)
2nd event rider
40
2nd event rider for CI
- only for CI
- w/o rider: after pay out = CI terminates
- W RIDER: keeps policy in force if has 2nd UNRELATED event, 2nd benefit paid (smaller)
41
CI exclusions
- same as disabilty insurance (add later)
+
non occ HIV/AIDS: medical practitioner that contracts HIV/AIDS on the job
42
Long term Care Insurance (LTC)
- covers living in nursing home (up to daily max cost)
43
LTC benefit triggers
Insured unable to do 2 or more activities of daily living (ADL'S
+
satisfies elimination period (0-90 days)
44
LTC Activities of dailhy living (ADL's - 6)
1. Transferring: moe around w/o assistance (i.e in/out of a chair)
2. Maintain Continence: controlling bladder
3. Toileting: get to/from + on/off toilet
4. bathe/shower
5. Get dressed/undressed
6. Feeding self
memory aid: all the things u do to get ready for work in AM (or pm before bed)
45
LTC: Cognitive Impairment
- can qualify if cognitive impairment (i. e alzheimers)
46
LTC expenses covered
- homecare w care pro's visitng patient
- respite care: family member providing care and needs relief temporarily
- Assisted Living: health facility, patient has own private residence
- Nursing Home/LTC facility): if patient nees 24hrs care/supervision
47
LTC payment models
Indemnity Model: pays LTC provider directly
Reimbursement model: insured pays, , then gets reimbursed
48
LTC MAX COVERAGE AMOUNTS CALCUATION
daily max X mac benefit period (in care days)
i,e
daily max $400
benefit period: 365 days
so: $400 x 365= $146,000
49
LTC ODDS/ENDS
EXCLUSIONS: similar to CI policies
COLA + ROP riders can be added
50
Extended health Plans (EHP)
- enhanced medical + hospital care on top of government care (i.e massage therapy, ambulatory care)
- dental care
- vision care
- accidental death + dismemberment (ad&d)
51
EHP Deductibles
deductibles could be:
- per claim
- single
- family
52
EHP per claim deductible
- i.e insured pays $15 DISPENSING FEE FOR EACH PRESCRIPTION
53
EHP Single Deductible
- i.e dental plan: insured pays $100, all other cover up till annual max
so, insured pays deductible the 1st time, then doesnt have to pay again for the year
54
EHP family deductibles
- family deductble === TOTAL family deductible
i.e: policy has $100 single deductible / $300 FAMILY deductible, so if each family member had $500 claim for the year :
person 1: 500 claim - 100 deductible
person 2: 500 claims - 100 deductible
person 3: 500 claim - 100 deductible
>>>> $300 family deductible MET<<<
person 4: 500 claim- 0 deductible ---> no more deductible BC family deductible MET
55
EHP co insurance
co insurance: % of claim ins co will pay subject to policy limits
56
EHP Policy w co-ins + Deductible
example:
- coverage up to $1500
- 80% co ins
- $100 deductible
1st claim: $800
step 1:
insurance co reimbursement:
>> always deduct the deductible 1st<<
800 claim - $100 DEDUCTIBLE= 700
step 2:
co ins: $700 x co ins 80%= $560 reimbursed
57
Group Plan specifics
???
58
Group plans: DIff types of groups
- employers
- trade associations
- creditrs (i.e mortgage life ins)
59
Group plans: Group Make up
insurers asses overall risk of GROUP by analyzing:
- Avg age
- olde group = higher premium
- Gneder: women pay less for life ins but more for disability
- nature of biz: i.e contructions workers pay more
- comaprable businesses : looks at claims from other similar groups and uses data to assess this one
- turnover rate: past claims statistics
60
Group Plans pricing: Initial and renewal premiums for group plans (3)
3 main methods:
1. Manual Method
2. experience Method
3. Blended Method
61
Group Plans (pricing): Manual method (pooled pricing)
- Prmeium for 1 group based on claims experience from another (similar) group
62
Group Plans (pricing) : CLAIMS EXPERIENCE METHOD
- usues groups claims experience from prior years to set renewal premiums
- rarely used
63
Group plans (Pricing): Blended Method
- combination of manual and claims experience method
- How much of each is blended depends on on the reliability of the claims statistics (i.e a small group stats not as reliable)
64
Group Plans: Refund accounting (for the group)
if claims lower than expected == refunds part of premium to employer
claims higher == factored in to next renewal date
65
Group Plans: Non Refund Accounting (For the Group)
if claims are lower, NO REFUND , ins co keeps all
claims higher == factored in to next renewal date
66
Group Plans: Contributory plans (for the individual)
member (employee) must contribute to the premium
67
Group Plans: Non contributory plans (For the individual)
member (employee) does NOT have to contribute to the premium (employee pays all)
all qualified employees REQUIRED to join
68
Group Plans: Administrative Services Only (ASO)
- lowers costs for VERY large companies (self insure)
- company pays ins claims for employee deaths/ claims themselves
- insurance co provides admin services only--->
69
Group Plans: Typical forms of coverage (DEEL)
- Disability Insurance
- Extended health care Benefits
- Employee Assistance programs (EAP)
- Life Insurance
70
Group Plans: Employee Assistance Programs (EAP)
- when employees have personal probelms impacting work
i. e depression, alcoholism, etc....
offers professional counselling
71
Group Plans: Pre existing conditions
contract will have clause such as :
72
Coordination Of Benefits
- when have more than 1 ins co that can pay, clause determines which pays 1st and who pays 2nd
- 1st paying ins co pays whatever insured entitled to
- 2nd pays lesser of:
