9 - Other insurance Flashcards
Personal Accident and Sickness Insurance
What is it? Difference to IP and CIC?
This is a short term policy (1 year or less) which pays out a lump sum on several events (death, permanent disablement, loss of an eye or limb etc).
It is designed to cover specific short term events, such as a business trip.
Usually includes medical expenses and weekly sickness benefits on top of the payout.
Difference to IP and CIC is the short term nature.
Personal Accidence and Sickness Insurance
Exclusions
Tax
Exclusions are the same as CIC/IP exclusions, but also pre-existing conditions, pregnancy and travel exclusions.
Tax is the same story as other policies, no tax relief on premiums or tax due on benefits. Unless it’s a group (i.e. employer) policy in which case the employer may claim tax deductions on premiums and so the benefits will be taxable when passed on to the employee.
Private Medical Insurance
Levels of cover
- Basic plans might have an excess (you pay the first £x of every claim), cap on the total claim you can make, restrictions on the benefits available.
- Standard plans might add outpatient cover (i.e. where you don’t stay overnight in hospital) and a wider list of hospitals
- Comprehensive cover will have higher limits, maybe extra benefits like private ambulances, cover for care at home
Private Medical Insurance
What is moratorium basis of underwriting?
Moratorium basis means any condition that was pre-exisiting in the 5 years before the policy started are not covered during the first 2 years of the policy.
Mortgage Payment Protection Insurance
What is it?
Exclusions
Usually taken out alongside a mortgage since it’s usually a persons biggest expense.
Pays benefits for a fixed period (12-24 months) equal to mortgage expense (limited by a percentage of your salary) if you are unable to work due to sickness, accident or unemployment.
Typical exclusions, including pre-existing medical conditions, if you had knowledge of a potential redundancy, if you work less than 16 hours a week, worked less than 5 months pre-policy.
Accident, Sickness & Unemployment Insurance (ASU)
What is it?
Difference to personal accident and sickness?
ASU is a short term policy which pays you an income for a period of up to 2 years if unable to work due to accident, sickness or unemployment.
PAS policies pay out lump sums and relate to an event (i.e. accident) rather than an income sum while you are unable to work.
Effectively more similar to MPPI except that the benefit is not limited to the size of your mortgage payment (it will still be capped at a % of your salary).
Summary of non-life cover types
Are the following short or long term, and to they pay income or lump sum?
- Income protection (IPI)
- Critical Illness (CIC)
- Personal Sickness and Accident (PSA)
- Accident and Sickness Assurance (ASA)
- IPI - Long term income paying policy
- CIC - Long term lump sum policy
- PSA - Short term lump sum policy
- ASA - Short term income paying policy
