Topic 12 Heath & General Insurance Flashcards
(87 cards)
1
Q
What is Critical Illness Cover (CIC)?
A
Insurance that provides a lump sum to someone who can’t work due to serious illness
2
Q
Is Critical Illness Cover taxable?
A
No it is a tax free amount
3
Q
What do all these have in common?
- Most Forms of Cancer
- Heart Attack
- Stroke
- Coronary Artery Disease (needing surgery)
- Major Organ Transplant
- Multiple Sclerosis
- Kidney Failure
A
Covered by Critical Illness Cover
4
Q
What are the 3 core conditions for set out for Critical Illness Cover by the ABI?
A
- Cancer
- Heart Attack
- Stroke
5
Q
What other type of disability are sometimes covered by Critical Illness Cover?
A
- Paralysis
- Blindness
- Loss of Limbs
6
Q
What are the typical uses of Critical Illness Cover?
A
- Long Term Care
- Alterations to Living Accommodation
- Medical Equipment
- Enhancing quality of life
- Mortgage Repayment
7
Q
What is Income Protection Insurance (IPI)?
A
Pays an income when accident or illness prevents somebody from performing their normal profession
8
Q
Why might an Insurance company pay Income Protection Insurance to a person ill or disabled with child care responsibilities?
A
As the person may incur child care fees or housekeeping services
9
Q
How are the premiums for Income Protection Insurance (IPI) determined?
A
By the occupation of the life insured
10
Q
How many classes of occupation does Income Protection Insurance (IPI) have?
A
4 Classes from lowest to highest in order of risk and premiums paid
11
Q
What class of premium would the below occupations fall into for Income Protection Insurance purposes?
- Clerical
- Professional
- Administration
A
Lowest Risk
Class 1
12
Q
What class of premium would the below occupations fall into for Income Protection Insurance purposes?
- Hairdressers
- Pharmacists
A
Low risk of accident
Class 2
13
Q
What class of premium would the below occupations fall into for Income Protection Insurance purposes?
- Farmers
- Electricians
A
Moderate risk of accident
Class 3
14
Q
What class of premium would the below occupations fall into for Income Protection Insurance purposes?
- Manual Labourers
- Industrial Chemists
A
Highest risk of claim/ accident/ health problems
Class 4
15
Q
What are the below in relation to Income Protection Insurance (IPI)?
- Age of life insured
- Amount of Benefit
- Current state of health
- Past Medical History
- Length of Deferred Period
A
Other factors that affect the premium of IPI a person pays
16
Q
What are the 2 premium types of Income Protection Insurance (IPI)?
A
- Reviewable Premiums
- Guaranteed Premiums
17
Q
What are the features for a Reviewable Premium for Income Protection Insurance?
A
- Starts of with a low premium
- Reviewed in the future
- May increase
18
Q
What are the features for a Guaranteed Premium for Income Protection Insurance?
A
- More expensive at the start than Reviewable Premiums
- Guaranteed for the policy’s term
19
Q
What is the “ Deferred Period” on a Income Protection Insurance policy?
A
The period of that must elapse between the claim being made and the first benefits being received
20
Q
All the below are what?
- 4 Weeks
- 13 Weeks
- 26 Weeks
- 52 Weeks
- 104 Weeks
A
Typical Deferred Periods for Income Protection Insurance
21
Q
Why would a self employed person opt for a shorter deferred period?
A
To avoid financial loss
22
Q
shorter deferred periods have larger Premiums
True or False
A
True
The longer deferred periods have lesser premiums
23
Q
What percentage of pre-illness wages does a Income Protection Insurance Policy pay?
A
- 50% - 65%
- 75% (Group Policy)
24
Q
What is a “Proportion Benefit” of a Protection Insurance Policy
A
Where a reduced benefit is paid to a claimant who can return to work on reduced income
25
Which of these people would not pay tax & NIC on Income Protection Insurance benefits?
- IPI set up a part of a group scheme
- IPI set up individually
ICI set up individually
26
What is Accident, Sickness & Unemployment Insurance (ASU)?
A tax free short term insurance that covers mortgage repayments due to:
- Accident
- Illness
- Loss of employment
27
How does Accident, Sickness & Unemployment Insurance (ASU) work?
A level of income is paid to cover the mortgage repayments for a period of 2 years
28
What happens if a Accident, Sickness & Unemployment Insurance (ASU) claimed is dismissed or resigns voluntarily from their job?
They will not receive an income as the policy does not paid out under these circumstances
29
Who is the proposer on a Accident, Sickness & Unemployment Insurance (ASU) policy?
Individual applying for the policy
30
How are Accident, Sickness & Unemployment Insurance (ASU) & Income Protection Insurance (IPI) similar?
The both have a deferred period
31
These are what?
- Proposer must have been actively & continuously employed for a specified minimum period before starting the plan
- Any redundancy that the proposer beleived was pending is excluded
- Not payable if redundancy starts within a period of cover starting
Restrictions on Accident, Sickness & Unemployment Insurance (ASU) cover
32
How often is an Accident, Sickness & Unemployment Insurance (ASU) reviewed?
Annually
33
What can an insurer do in relation to Accident, Sickness & Unemployment Insurance policy (ASU) that they cannot do on an Income Protection Insurance Policy (IPI)?
Increase the premium or withdraw the cover for persist claimers
34
True of False
A person who sets up their own Accident, Sickness & Unemployment Insurance (ASU) individually receives tax relief on contributions?
False
They do not receive tax relief
35
What is Private Medical Insurance (PMI)?
Protection plan to provide cover for private medical treatment
36
What are the benefits of Private Medical Insurance (PMI)?
- Avoidance of waiting lists
- Choice of hospital
- Flexibility in timing of treatment
- High quality accommodation
- Choice of medical consultant
37
Private Medical Insurance (PMI) reimburses charges but what are the below charges related to?
- Nursing Fees
- Accommodation
- Operationing fees
- Drugs
- Ambulance costs
In-patient charges
38
Private Medical Insurance (PMI) reimburses charges but what are the below charges related to?
- Surgeons fees
- Anesthetics fees
- Pathology
- Radiology
Surgical and medical fees
39
Private Medical Insurance (PMI) reimburses charges but what are the below charges related to?
- Consultant fees
- Home Nursing fees
- Pathology
- Radiology
Out-patient charges
40
How can Private Medical Insurance (PMI) be arranged?
- Individually
- Employer Scheme
41
What's affects the premiums for Private Medical Insurance?
- Location
- Type of Hospital
- Standard of accommodation
- Type of scheme taken out
- Applicants age
42
What are all the below?
- Pre existing medical conditions
- Standard optical care
- Standard dental care
- Standard maternity care
- Chiropody
- Self inflicted aliments (substance abuses)
- Cosmetic surgery
- Alternative medicine
Exclusions to Private Medical Insurance (PMI)
43
Are the premiums for Private Medical Insurance (PMI) subject to tax?
Yes they are subject to tax for individual and work scheme policies
44
True or False
The benefits of Private Medical Insurance (PMI) paid out are tax free?
True
45
What is Long Term Care Insurance (LTC)?
Insurance that provides funds for people in later life when they can no longer look after themselves competently
46
All these are examples that what type of insurance is required more than ever.
- Family may live some distance away
- People are living longer
- Quality of later life expectations have increased
- Lack of confidence in NHS to provide later life care
Long Term Care Insurance (LTC)
47
How are benefits for Long Term Care Insurance (LTC) calculated?
The are dependant on the person ability to carry out activities of daily living (ADL's)
48
What are the below?
- Washing
- Dressing
- Feeding
- Using the toilet
- Movement between rooms
- Preparing food
Examples of Activities of Daily Living (ADL)
49
True or False
The more Activities of Daily Living (ADL) that a person cannot carry out the greater the benefits of Long-Term Care Insurance (LTC) they receive?
True
50
How many Activities of Daily Living (ADL) would a person need to be incapable of before a claim for Long Term Care Insurance (LTC) to be accepted?
2-3
51
What happens to an annuity that is purchased with an immediate long term care need?
The benefits are paid direct to the care provider tax free provided it is a Immediate Needs Annuity
52
What is a "Immediate Needs Annuity"?
An annuity that is used to pay for care needs the customer already has
53
What is a "Deferred Needs Annuity"
An investment builds funds that can then be used to pay for care as needed
54
If an annuity is not deemed as an "Immediate Needs Annuity" how is tax charged?
On the interest element as savings. 20% is deducted at source. Higher & Additional rate tax payers will need to pay at appropriate bands
55
What does "life of another" mean in relation to Long-term care insurance?
Means benefit is still paid tax free provided they are used for the person under the policy & sent straight to the care provider.
56
How many groups in is General Insurance categorised into?
5 but is split into an further 2.
1. Property & Commercial
2. Commercial
57
What type of general insurance does the below loss fall into?
- Property loss
- Liability loss
Personal & Commercial
58
What type of general insurance does the below loss fall into?
- Personnel loss
- Pecuniary loss (defaulting creditors)
- Interruption loss (causes by another of the above losses)
Commercial
59
What type of insurance does an "Indemnity" relate to?
General Insurance policies
60
What is the definition of an Indemnity?
That claimants should be restored to the same financial position as before the loss occurred.
61
For a Life & Personal accident policy what are the common ways insurance companies restore claimants?
1. Cash
2. Repair (Motor Insurance)
3. Replacement
4. Reinstatement
62
These are examples of why a policyholder would do what?
- Unsure of appropriate figure
- Inflation increased the amount assured
- Deliberate to keep the premium down
Under Insure items
63
What does the "principle of average" mean to a claim for insurance?
Claim is scaled down to the proportion of the premium paid against the premium that should have been paid for proper value
64
What is an Excess?
A deduction made from any claim payment to a policy holder
65
What is Buildings Insurance?
Cover on anything left on property if this were to be sold
66
What are the below examples of?
- Fire & lightning strikes
- Explosions, Subsidence, Earthquake
- Storms & Floods
- Damage by vehicles, aircraft, animals
- Damage by trees, TV aerials
cover of buildings insurance
67
What is Contents Insurance?
Anything that would be taken with you if you were to sell a property
68
What are the below examples of?
- Accidental damage to goods caused by professional removers
- Extended contents cover for specified personal property outside the home
- Damage to freezer due to electricity failure
Additional examples of contents insurance
69
What is All Risks (Extended Contents) Cover
Cover policy holder for loss, damage or theft of items regularly taken out of the home
70
What are the 2 types of All Risk Cover?
1. Unspecified Items
2. Specified Items
71
What are the 3 types of Motor Insurance?
1. Third Party
2. Third Party, fire & theft
3. Comprehensive
72
What is Third Party Cover?
Is a car insurance that is does not involve the policy holder in an accident.
73
Does Third Party Cover also cover the policy holder driving another vehicle?
Yes
74
What are the below?
- Death or Injury to third party (hospital charges)
- Damage to property
- Legal costs incurred in defence of claim
Typical Third party cover
75
What extras do Third party, fire & theft offer over Third party cover only?
Extra elements to cover fire and theft of the vehicle
76
The below are extras of what type of car insurance types?
- Damage to cover on all terms basis
- Loss/damage of times in vehicles
- Personal accident benefits
- Windscreen damage
Comprehensive Motor Insurance
77
True or False
A certificate of insurance is of no effect unless a document of insurance can be provided?
True
78
When is travel insurance typically paid?
On Journey from:
- 5 days to 1 month
- Annually
79
- Cancellation due to illness
- Missed flights
- Medical expenses
- Delayed departures
- Personal expenses
- Loss of passport or possessions
- Personal Liability
- Legal expenses
Typical examples of Travel Insurance
80
What is Insurance Premium Tax (IPT)?
Is a tax on General Insurance Premiums
81
Who pays Insurance Premium Tax (IPT)?
The policy holder as part of the premium
82
What is Payment Protection Insurance (PPI)?
Protection that covers monthly loan repayments if the policy holder is unable to pay due to sickness, accident or unemployment.
83
What is Payment Protection Insurance (PPI) paid on?
A specified lending product
84
What is the usual payment period of Payment Protection Insurance (PPI)?
12 months
85
It is illegal to drive on the roads without a policy of insurance that covers a third party risk?
True or False
True
86
Life Assurance and Income Protection Insurance (ICP) are subject to Income Premium Tax (IPT)?
True or False
False
Income Premium Tax (IPT) is not applicable to Long Term Insurance
87
Other than a deferred period why else are Accident, Sickness & Unemployment Insurance (ASU) & Income Protection Insurance (IPI) similar?
Both benefits are paid tax free
