Danko Risk Review Flashcards
(39 cards)
Indemnity and 4 principals
Indemnity = promise to pay for a loss
** 4 Principals **
1. Insurable Interest
2. Concept of actual cash value
3. Limit the ability to profit from loss
4. Subrogation
Stop-loss coverage to partially self-insure
Makes sense for small companies (around 100 Emps)
Elements of Insurable Risks
Loss must be
- Fortutious
- Accidental
- NOT be catastrophic
Insurancing Agreement
INSURER promises to pay for the loss if the loss occures from covered peril
Delcaration Page
- factual statements identifying person, property or activity being insured
- Provides descriptive info about the insurance being provided
Important facts in selecting an INSURER
Policy type offered
A.M Best Rating
Keeping a wild animal
is absolute liabiliyt for owner
When you are responsible for other people’s actions
Vicarious liability = respondeat superior
Information general used during underwriting
- Info from Broker
- Physical Exam
- Investigations
(Cost-benefit analysis is not part of underwriting; applicant may perform this on their own)
Worker’s Compensation is legally classified as ?
absolute liability (Employer are liable for msot work-related injuries and diseases )
Perils excluded / not covered from PAP
- Normal Wear and Tear
PPO
PPOs:
* Provide medical care on a fee-for-service basis
* You can go to PPO physician or outsid of the network under PPO plan.
* out of network benefits may be reduced and deductibles may be higher
HMOs
- Emphasize cost containment
- Pay a fixed monthly fee to providers
ER adds cost of disability insurance coverage to EE’s W-2
That means these $$ are provided as a bonus and EE is paying DI premiums thus the DI benefits are tax-free to EE
Medicare Coverage: Skilled Nursing Facility Payments
Day 1 - 20 = Medicare Pays fully / No co-pay from patient
Day 20-100 = Patient co-insurance of $209.50
Day 101 and beyond: Patient pays all costs
When does Medicaid vs. Medicare apply?
**MediCARE **
*skilled nursing care for limited time FOLLOWING a HOSPITALIZATION
(Day 1-20 = no co-pay, D20-110 = max out of pocket of 209.50/day; day 101 + = you pay it all);
* Condition is epxected to improve
MediCAID =
*Means test apply
*May cover long-term custodial care costs;
*Condition is not expected to improve
For INSURED - What’s the most beneficial definition of disability?
Own Occ (any Occ is hard to prove)
Residual (partial) disability vs. Total Disability
Residual/Partical disability insurance, provides benefits when you are still able to work but have experienced a loss of income due to a disability.
VS
Total Disability insurance = pays out when you can no longer work at all.
*RD helps bridge the gap when your disability limits your ability to earn what you did before becoming disabled.
*Require coordination with TD
Dividend Options
*Cash
*Reduced Preimiums
* Paid-up Additions
* One Year Term / 5th Dividend
Simplest and cheapest Life Insurance Policy in a 2 partner CP Buy-Sell
1st to die; 2nd policy is not needed after the 1st death
(2 whole life policies are expensive)
What must be included in Ilustrations?
*Agent’s name
*Insured’s name
* Death Benefits
* Name of the Insurance Carrier
(Ratings are not required)
Surrender Value and tax treatment
Surrender value (ordinary income) = Total Cash value - Premium’s Paid Out of pocket
Total cash value = Net cash value + Loans
Preimums paid out of pocket = Preimums billed - Dividends used to reduce premiums
Transfer of value exclusions
Gifted life policy
transfer to a business partner
transfer to a corporation in which insured is shareholder or an officer
transfer to the insured
transfer due to divorce agreement
transfer to spouses and childern
MEC Policy
*entered into on or after 6/12/1988
*Fails 7-pay test
