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Wrong Answer Deck! > Insurance > Flashcards

Insurance Flashcards

1
Q

Hazards

A

Increase the chance of a loss (and frequency or severity)

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2
Q

Capital Retention Calculation

A

Divide yearly need by RoR or (RoR - inflation)

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3
Q

Absolute Liability

A

an extra hazordous condition which causes a loss for others
ex: wild animals, blasting, workers comp

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4
Q

Vicarious Liability

A

individual held responsible for the negligence of another

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5
Q

Participating Policies

A
  • pays annual dividend to policy holder
  • overcharge premium, then returns
  • issued by both types of insurance companies
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6
Q

Property Loss Calculations

A

If the amount of insurance is less than 80% (90% for biz) of the replacement, insurer pays:
1. Actual Cash Value
2. [(Insurance Carried/Insurance Required) x loss] - deductible = insurance payment amount
* 3. Insurance Required = Replacement cost x coinsurance %

Insurance 3-7

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7
Q

Exclusions

from ALL homeowner isurance

A

OPEN WIF
* Ordinance of Law
* power failure
* earthquake
* Neglect, nuclear hazard
* War
* Intentional loss
* Flood

Insurance 3-5

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8
Q

Basic Perils

A

WHARVES/FLT
* Windstorm
* Hail
* Aircraft
* Riot
* Vandalism, Vehicles
* Explosion
* Smoke
* Fire
* Lightning
* Theft

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9
Q

Broad Perils

A

Everything in basic plus RAF:
* Rupture
* Artificially generated electricity
* Falling objects, freezing plumbing

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10
Q

Open Perils

A

Insurer pays for damage by any peril except ones that are specifically excluded

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11
Q

Section II Coverage (Homeowners)

A

Covers personal liability (E) and Medical payments (F)
is included in all policies, including renters

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12
Q

HO-4

A

Renters policy (no coverage for dwelling (A))

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13
Q

HO2

A

homeowners for broad form perils

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14
Q

HO-3

A

homeowners but open perils for A, B, D

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15
Q

HO-6

A

Condo owner policy

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16
Q

Section I Coverage

A

A: Dwelling
B: Other Structures
C: Personal Property
D: Loss of Use

17
Q

Medicare Part B

General rules

A
  • voluntary
  • deductible first
  • medicare pays 80% of approved charges
  • NO stop-loss, leaving client w/ unlimited (20% of expense) exposure
18
Q

Medicare Part B Benefits

A
  • doctor visits
  • test, radiology, blood transfusion, PT/OT, mental illness
  • preventative care
19
Q

COBRA Eligibility

A

Must have 20+ employees and then:
18 Months
* termination, full to part time
36 Months
* death, divorce, medicare, loss of dependent status

Note: disability w/in 60 days extends coverage by 11 months

20
Q

Medicare Nursing Facility Coverage

A
  • First 20 days - covered 100% by Medicare
  • 21-100 days, insured pays $200/day
  • 100+ insured pays 100%
21
Q

Medicare Nursing Facility Requirements

A
  • Must be expected to improve
  • requires 3 consecutive days of hospitalization
  • must be no more than 30 days between hospital and nursing
  • covered under Part A
22
Q

Viatication

A

For terminally ills persons
* terminally ill = physician certified to die w/in 24 months
ALL sales proceeds are tax free if terminally ill

23
Q

Life Settlement

A

In the case of sale of a policy when NOT terminally ill:
* Tax free
* income = cash surrender - basis
* LTCG on the rest

24
Q

non-forfeiture options

A
  • Cash
  • reduced paid-up insurance
  • extended term

“Can’t Even Pay”

25
Q

Dividend Options

A
  • cash
  • reduced premium
  • accumulation w/ interest
  • paid-up additions
  • one year term/5th dividend
26
Q

Settlement Options

A
  • cash
  • interest only
  • fixed period
  • fixed installment
  • 4 life income
27
Q

Transfer for Value

A

If a policy is transferred for valueable consideration, income tax exclusion is lost
exceptions (transfers to):
* insured
* partner of insured
* corp where insured is sharehold or officer
* puruant due to divorce

28
Q

MEC

A
  • meets requirements of life insurance policy
  • entered into after 6/21/1988
  • fails “7 pay test (excess premium in first 7 years)
  • taxed similar to annuity
  • once an MEC always an MEC
29
Q

Social Security Disability Coverage

A
  • Disability must be 12+ months or result in death
  • 5 month waiting period, benefits start in month 6
30
Q

Comparative Negligence

A

when the injured party plays a role in the damages - leads them to pay a portion of the loss
ex: pedestrian is foudn 20% negligent (injured) and the driver is 80% negligent, damages are adjusted accordingly

31
Q
A

Wrong Answer Deck! (6 decks)

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