4A-C Flashcards
Hospital treatment insurance other names
Surgical cash, major medex, surgery cover
Major medex policy definition
Form of budget PMI that typically pays a given amount for specified treatment only – typically doesn’t cover out-patient or pyschiatric
Cancer only cover
Fixed cash lump sump on the diagnosis of a specified cancer
7 typical travel insurance policy inclusions:
- Emergency medical/surgical
- Emergency dental
- Evac/repat
- Accommodation refund if not possible to return home
- Travel expenses of a relative travelling
- Loss of baggage
- 24/7 emergency helplines
Travel insurance exclusions
Where the purpose or the visit is to have medical treatment and pre-existing conditions (unless pre-agreed)
Personal accident insurance
Pays out a fixed sum if the insured has an accident that results directly in personal injury – quantity depends on severity of accident
PA insurance for temporary disabilities
May pay a weekly sum for 12-24 months
Sickness insurance
Weekly or monthly benefit if the insured is unable to work due to illness
Sickness insurance limitations
Usually 12-24 months only
Reason for changing sickness insurance policy terms
Statutory changes, e.g., IPT
Unemployment insurance
Pays a weekly or monthly benefit if the insured loses their job or the business goes into involuntary liquidation
ASU insurance
Includes accident, sickness and unemployment in one policy
Payment protection insurance
ASU insurance designed to protect loan payments – also known as creditor insurance
Maximum PPI benefit
– Usually linked to monthly loan repayment amounts (e.g., 125% of the borrower’s monthly mortgage payment)
What determines the amount of benefit payable by PPI?
Continuing income received by the insured
Why do PPI policies have a short lifespan
Buyers feel more at risk during the early years – mortgage payment becomes a smaller proportion of income over time
LTC in the NHS
NHS has very little responsibility
NHS and Community Care Act 1990
Passed responsibility for LTC funding from central government to local authorities
Care Act 2014
Individuals expected to pay for their own care if they can afford it, but capping the amount regardless of savings or assets
Dilnot Commision changes
– Lifetime cap on all personal contributions towards care costs
– Increase in the lower capital threshold and upper capital threshold
– PEA and minimum income guarantee rises with inflation
PEA
Personal Expenses allowance
LTC insurance
Provides a pre-selected monthly income to meet the cost of care home or nursing fees
Disabled definition
When a member is no longer able to perform a set number of ADLs
ADLs abbreviation
Activities of Daily Living
ADLs
- Washing
- Dressing
- Feeding
- Toileting
- Mobility
- Transferring
Pre-funded LTC policies
Customer pays monthly sum fixed into a policy while still in reasonable health
Immediate needs/point of need policy
Customer pays a capital sum to an insurer only once the need for care has arisen – insurer invests the money to generate max income to pay for care
Long-term income protection (IP)
Policy provides a replacement monthly income when a customer is unable to work (after a pre-set deferred period) because of sickness or an accident
When do IP policies cease?
When the insured reaches a pre-set retirement age
Short-term income protection
Payments typically for one-five years
Advantages of short-term underwriting
- Lower cost
- Less onerous underwriting
- Fewer ratings
Reasons for cancelling IP
- Policy reaches termination date
- Death
Taxation on IP
Long-term, so not subject to IPT.
ESA abbreviation
Employment support and allowance
ESA definition
Main state benefit for those who cannot work due to illness or disability
What is income-related ESA being replaced with?
Universal Credit
IP deferred period
– Usually 3m-1yr
– Shorter periods available for self-employed
Hidden benefit of IP
Helping customer get back to work before needing a claim
How does Group IP work?
Payments made to the employer, who pays them to the employee in the form of a salary
Employee IP taxation
Subject to P11D and NICs
Individual IP taxation
Tax-free
What happens if someone with IP insurance returns to work on a part-time basis or accepts a lower paid job?
Policy usually pays a proportionate benefit
Critical Illness
Predetermined lump sum for:
1. the diagnosis of a range of specified illnesses
2. undergoing one of a range of specified hospital procedures
Rules for paying CI
– Member must survive a specified period, usually 10 to 30 days
– When member has a TPD
TPD
Total permanent disability
TPD definitions
- Unable to do own occupation ever again
- Unable to do a suited occupation again
- Unable to do specified work tasks ever again
- Unable to look after yourself ever again
Waiting period before CI claims will be accepted
Specified waiting period, e.g., six months before paying the benefit
When does CI cover expire
At retirement age
Which policies does a waiver of premium apply to?
Many long-term and some short-term policies
Waiver of premium
After usually a three- or six-month deferred or waiting period, the insurer pays/waives premiums if they are unable to work due to illness – usually underwritten
When do premiums stop being waived
- When reaching retirement age
- When returning to work
- Death
Typical health screening frequency
– Generally carried out every 2 years or so
Who pays for private GP prescriptions
The patient
Private GP examples
- Private GP
- Walk-in medical centre
- Company GP
- VGP
Ways for employers to provide health benefits
- Free, but either opt-in or opt-out
- Free, but flex
- Voluntary
Things for individuals to consider when taking out PMI
- Priorities
- Risk to livelihood
- Health
- Affordability
What to consider when choosing a policy
- What is available
- Which benefits are most important
- Affordability
- Overall value
Fact-find
Undertaken by an ISA or intermediary to ascertain details about a customer and their needs
Hard facts
E.g., age, income, state of health
Soft facts
Personal priorities and wants
