Learning objective 9

Question 1

Personal Accident and Sickness Insurance (PAS)

• When does it pay out
• How can it pay out?

Answer 1

• Pays out if insured suffers accident or is off work due to sickness
• Pays out lump sum as well as income
• Short term policies

Question 2

What is excluded from PAS?

Answer 2

• Usual Exclusions plus anything the insurance company would argue is a result of negligence (alcohol, drug related etc.)

Question 3

Taxation of PAS policies

Answer 3

No tax relief on premiums or payment of benefits.

Question 4

Private Medical Insurance (PMI)

Answer 4

• Cover against the costs of private medical treatment
• Only covers costs incurred rather than a set amount (Indemnity insurance)
• Aimed at conditions where speedy treatment can be provided to enable quicker return to work

Question 5

What is the need for PMI

Answer 5

• Bypass waiting lists
• NHS less effective with long waiting times

Question 6

PMI - Budget plans

Answer 6

• Cheapest option
• Lowest benefits and highest excess
• Entry level cover
• May cover outpatient only

Question 7

PMI - Standard plans

Answer 7

• Most common
• Wider cover than budget with lower excess
• Covers in and outpatient

Question 8

PMI - Comprehensive Plans

Answer 8

• Complete protection
• Longest claim periods
• Choice of hospitals/surgeons
• In and outpatient

Question 9

PMI - Moratotium underwriting

Answer 9

• Pre-existing conditions within last 5 years are excluded for the first 2 years or so
• No other underwriting required

Question 10

PMI - Full underwriting

Answer 10

• Full medical assessment
• Clarity on what could and could not be covered

Question 11

PMI - Claims

Answer 11

• Claims are paid directly to hospital to cover costs, tax free

Question 12

Payment protection insurance (PPI) and Mortgage payment protection insurance (MPPI)

Answer 12

Protect clients who cannot pay debts due to sickness, accident or involuntary unemployment

Question 13

PPI

Answer 13

• Covers unsecured debts
• Min payments on credit cards and full monthly payments on loans
• May also cover involuntary redundancy
• No tax relief on premiums
• No tax payable on benefits

Question 14

MPPI

Answer 14

• Covers Mortgage / secured debts for a set period of time
• Ancillary costs e.g. home and life insurance
• May also cover involuntary redundancy
• No tax relief on premiums
• No tax payable on benefits