4. Introduction to financial products and customer needs Flashcards
1
Q
Types of provision
A
- Social security
- Financial products
- Contracts
- Schemes
- Transactions
- Micro-insurance
2
Q
Examples of social security
A
- Medical care
- Income support (disability, unemployment and illness)
- Child support
- Housing support
- Long term care support.
3
Q
Financial products
A
- Insurance
- Reinsurance
4
Q
Schemes
A
- Pension
- Benefit
- Investment
5
Q
Examples of micro-insurance
A
- Funeral cover
- Credit life insurance
- Basic health and accident cover
6
Q
Insurance principles
A
- Policyholder must have insurable interest in risk
- Risk must be financial + quantifiable
- Individual risks must be independent
- Probability of event occurring must be reasonably small
- Large numbers of similar risks must be pooled to reduce var
- Limit on ultimate liability taken
- Moral hazard must be eliminated as far as possible
- Sufficient existing data/info to quantify risk
7
Q
Customer needs
A
Logical vs Emotional
Current vs Future needs
Attitudes to risk
Vulnerability
8
Q
Logical needs can be analysed as:
A
- Maintaining current lifestyle
- Protection
- Accumulation for a known purpose
- ” “ “ “ unknown “
9
Q
Vulnerable person
A
Susceptible to detriment due to their circumstances, particularly if firm isn’t acting with appropriate level of care
10
Q
Categorisation of benefits
A
- Benefits on unpredictable events.
- Certain, but unpredictable timing.
- Benefits for immediate consumption
- Benefits on events predictable in time.
- Benefits from account of disposable income and capital.
