Long-term Insurance

Question 1

Insurance contract

Answer 1

A contract between an insurer and an insured,

whereby the insurer undertakes in return for the payment of a premium

to render to the insured a sum of money, or its equivalent,

on the happening of a specified uncertain event in which the insured has some interest.

Question 2

Insurance law

Answer 2

Common law
Long-term Insurance Act 52 of 1998
Short-term Insurance Act 53 of 1998
Insurance Act 18 of 2017
FAIS Act
The Constitution and Bill of Rights

Question 3

ESSENTIALS

Answer 3

An undertaking by the insured to pay a premium

An obligation by the insurer to compensate the insured for for either patrimonial or non-patrimonial loss

The risk that is being insured against

An insurable interest

Question 4

Parties

Answer 4

The insurer (registered with FSB)

The insured (policyholder)

The third party (cessionary/beneficiary)

Question 5

Indemnity insurance

Answer 5

the insurer will indemnify the insured for patrimonial loss/damage suffered as a result of the event insured against happening.

Question 6

Characteristics of indemnity contract

Answer 6

for patrimonial loss (property)

monetary compensation (for actual loss)

limited financial interest (to loss/damage)

Must exist at time of loss

Question 7

Capital insurance

Answer 7

the insurer undertakes to pay a specified amount to the insured if the insured event occurs.

Question 8

Characteristics of capital insurance

Answer 8

for non-patrimonial loss (limbs/life)

monetary satisfaction (regardless of financial loss)

unlimited interest (own/spouse) & limited financial interest (family members/debtors)

Must exist at time of taking out the contract

Question 9

Principle of indemnity

Answer 9

insurer undertakes to indemnify the insured against loss or damage resulting from the occurrence of an uncertain event