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ETHICS (2022 LLQP) > A&S - SEEWHY VIDEOS > Flashcards

A&S - SEEWHY VIDEOS Flashcards

1
Q

Insurance needs pyramid

A

TOP(least important) TO BOTTOM (most important):

  • LTC
  • CI
  • DI
  • LI
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2
Q

DISABILITY: capitalization of income def + formula

A

def: how much capital req to replace income indefinitely

required annual income / expected investment return

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3
Q

DISABILITY: job classifications risk class

A

top(best)…. bottom (worst/hiest risk)?:

4A (BEST): DOCTORS, LAWYERS, DENTISTS, SENIOR EXECUTIVES

3A
2A
A
B (WORST): MANUAL LABOURERS IN HIGH RISK JOBS, I.E CONSTRUCTION WORKERS

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4
Q

DISABILITY:Definition of disability (3) for individual policies

A
  1. Any occupation: worst form of coverage
  2. regular occ
  3. own occ (best)

note: definitions can be mixed, i.e own occ for 1 year, then any occ

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5
Q

DISABILITY: Any occupation definition of disability

A

disabled if unable to perform their OWN OCC or ANY OTHER OCC suited by education/experience

  • ## offered to WORST risk class (B)– i.e construction
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6
Q

DISABILITY: Regular occupation definition of disability

A
  • similar to own occ
  • disabled if unable to do ur regular occ
  • can CHOOSE (not forced) to work if diff occ w reduced/eliminated bens.
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7
Q

DISABILITY: Own occupation definition of disability

A
  • similar to regular occ
  • disabled if unable to do ur regular occ
  • can CHOOSE (not forced) to work in diff occ, BENEFITS WILL CONTINUE
  • Offered to BEST risk class (4A) – i.e doctors, lawyers
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8
Q

DISABILITY Occupational clause

A
  • if insured switches to riskier job: will adjust premium accordingly (more expensive)
  • if switches to less risky job: request downward adjustment (cheaper)
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9
Q

DISABILITY Elimination period (waiting period before benefits)

A
  • time period insured must be disabled before receiving benefits
  • shorter period= higher premium
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10
Q

DISABILITY Benefits Period

A
  • max time insured will receive benefits while disabled
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11
Q

DISABILITY: Renewability options- 3 types

A
  • Non canelable– best
  • guaranteed renewable
  • cancelable —- worst
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12
Q

Non cancelable (Non- Can)

A
  • Insurer MUST RENEW policy to specific age as long as premium being paid
  • cannot change premium, amend benefits, or cancel policy
  • offered to BEST risk— 4A (doctors, lawyers)
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13
Q

Guaranteed Renewable

A
  • insurer CAN ALTER premium if doing so for entire class of policies
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14
Q

Cancelable

A
  • inurer can cancel or adjust premiums at any time

- wort policy, so offered to worst risk— class B (i.e construction workers)

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15
Q

insurable income (for disability coverage)

A
  • salary from work
  • biz income
  • Part time work income
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16
Q

UNinsurable income

A
  • pension income
  • investment income!!!!! (but can reduce amt of coverage)
  • trust fund income
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17
Q

Waiver of premium

A
  • standard in disability policies
  • when disabled, insured pays premium for 1st 90 days, afterwards premium waived (and refund premiums colleted)

waivede till:
insured no longer disabled
certain age
certain number of years

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18
Q

recurrent disability clause

A
  • if insured OFF disability, returns to work and suffers same/related disability withing a time frame (i.e 6 months) ===== continuation of benefits (deduct time already used on previous claim)
  • elimination period waived 2nd time and benefits restart right away
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19
Q

presumptive disability clause

A

if:

  • perm blind
  • perm hearing
  • loss of 2 limbs incl use of limbs

Assumes disbaled w/o proof
no elimination period
benefits start ASAP
no proof that stopped work

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20
Q

Common Exclusions for disability coverage

A
  • war/terrorism
  • self inflicited wounds/ suicide attempt
  • participating in illegal activities
  • normal pregnancy/delivery

insurer could also add specific exclusions relevant to insureds health conditions or high risk sports

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21
Q

Policy rider

A

an add on options added when policy purchased or adterwards

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22
Q

Future Purchase Option (FPO)

A
  • Isured can add coverage in stated amounts on stated dates W/O MEDICAL underwriting but subject to FINANCIAL underwriting (need to proove income) + this increases premium
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23
Q

Cost of Living Adjustment (COLA)

A
  • ADED TO DISABILITY POLICY
  • BENEFITS INCREASE YEARLY TO COMBAT INFLATION
  • 2 CALCULATION METHODS: SIMPLE METHOD OR COMPOUND METHOD
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24
Q

COLA calculation : simple method

A
  • benefit oncreases by SAME % annually
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25
Q

COLA calculation: Compound Method

A
  • coverage increased by rate of inflation as measured by consumer price index (CPI) up to a max amount
  • unused increase (less than max) can be carry fwd to future years
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26
Q

Accidental death + Dismemberment (AD+D)

A
  • BENEFIT PAID IF DIES AS RESULT OF ACCIDENT (CAR ACCIDENT, FIRE, ETC) OR IF INSURED DISMEMBERED
  • NO MEDICAL UNDERWRITING, BC ITS AN ACCIDENT, NOT HEALTH
  • claim does not impact benefits to be received
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27
Q

AD+ D exclusions

A
  • self inflicted injuries
  • suicide (or attemtped suicide)
  • Participation in dangerous sports
  • Flying plane (except passengers/ commercial airline)
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28
Q

DISABILITY rider: partial and residual benefots

A

residual benefits: Income related

Partial benefits: job function related

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29
Q

DISABILITY residual benefits definition

A
  • paid if: after being totally disabled, no work at all, insured can return to work at reduced capacity, making less then they were before
30
Q

DISABILITY residual benefits calculation 4 steps

A
  1. Income lost
  2. % of income lost
  3. 80/20 rule
  4. end benefit X % inc lost (if 80/20 rule doesnt apply)
31
Q

DISABILITY: residual benefits calculation (how to)

A
  1. Income lost: original monthly income - current monthly income= lost $
  2. % of income lost: lost $ / original monthly income= % lost
  3. 80/20 rule:
    lost more than 80%= full benefits
    lost less than 80% ==NO benefits
  4. full benefit X % inc lost = % of benefit he will receive
32
Q

DISABILITY partial Benefits

A
  • does not require total disability

- pyas partial benefit ( i.e 50% of full benefit)

33
Q

DISABILITY Rider: Return of Premium (ROP)

A
  • POLICY HOLDER receives part of premium back (tax free , W/O interest) under certain circumstances
34
Q

DISABILITY RIDERS

A
  • PARTIAL BENEFITS
  • RESIDUAL BENEFITS
  • RETURN OF PREMIUM (ROP)
35
Q

Critical Illness (CI) Insurance overview

A
  • a living benefit (pays before death if suffer serious illness + SURVIVE)
  • pays lump sum if diagnosed w illness covered in policy + SURVIVES # of days (i.e 30)
  • can do whatever want w lump sum (medical, vacation, etc…)
36
Q

Critical Illness (CI) details

A
  • stand alone product OR as a rider
  • anywhere from 10k-2m

Qualification period: 1st 30 days: any additoonal illness —> not covered

waiting (survival) period: diagnosed w covered illness + SURVIVE min 30 day (or longer for certain conditions)

so 30 days qualification+ 30 days survival = 60 days

37
Q

CI conditions covered

A

varies

Big 4:

  • heart attck
  • stroke
  • heart bypass
  • life threatening cancer

Memory aid: Hear and stroke foundation + BIG C

also:
10 conditions:

20 conditions:

38
Q

Child CI policy

A
  • benefit is less than adult
  • covers same as adults, but also illnesses more associated with kids
  • option to convert to adult plan
39
Q

RIDERS FOR CRITICAL ILLNESS POLICY (3-R.W.2)

A

return of premium (similar to Disability)
waiver of premium (similar to disability)
2nd event rider

40
Q

2nd event rider for CI

A
  • only for CI
  • w/o rider: after pay out = CI terminates
  • W RIDER: keeps policy in force if has 2nd UNRELATED event, 2nd benefit paid (smaller)
41
Q

CI exclusions

A
  • same as disabilty insurance (add later)
    +
    non occ HIV/AIDS: medical practitioner that contracts HIV/AIDS on the job
42
Q

Long term Care Insurance (LTC)

A
  • covers living in nursing home (up to daily max cost)
43
Q

LTC benefit triggers

A

Insured unable to do 2 or more activities of daily living (ADL’S
+
satisfies elimination period (0-90 days)

44
Q

LTC Activities of dailhy living (ADL’s - 6)

A
  1. Transferring: moe around w/o assistance (i.e in/out of a chair)
  2. Maintain Continence: controlling bladder
  3. Toileting: get to/from + on/off toilet
  4. bathe/shower
  5. Get dressed/undressed
  6. Feeding self

memory aid: all the things u do to get ready for work in AM (or pm before bed)

45
Q

LTC: Cognitive Impairment

A
  • can qualify if cognitive impairment (i. e alzheimers)
46
Q

LTC expenses covered

A
  • homecare w care pro’s visitng patient
  • respite care: family member providing care and needs relief temporarily
  • Assisted Living: health facility, patient has own private residence
  • Nursing Home/LTC facility): if patient nees 24hrs care/supervision
47
Q

LTC payment models

A

Indemnity Model: pays LTC provider directly

Reimbursement model: insured pays, , then gets reimbursed

48
Q

LTC MAX COVERAGE AMOUNTS CALCUATION

A

daily max X mac benefit period (in care days)

i,e
daily max $400
benefit period: 365 days
so: $400 x 365= $146,000

49
Q

LTC ODDS/ENDS

A

EXCLUSIONS: similar to CI policies

COLA + ROP riders can be added

50
Q

Extended health Plans (EHP)

A
  • enhanced medical + hospital care on top of government care (i.e massage therapy, ambulatory care)
  • dental care
  • vision care
  • accidental death + dismemberment (ad&d)
51
Q

EHP Deductibles

A

deductibles could be:

  • per claim
  • single
  • family
52
Q

EHP per claim deductible

A
  • i.e insured pays $15 DISPENSING FEE FOR EACH PRESCRIPTION
53
Q

EHP Single Deductible

A
  • i.e dental plan: insured pays $100, all other cover up till annual max

so, insured pays deductible the 1st time, then doesnt have to pay again for the year

54
Q

EHP family deductibles

A
  • family deductble === TOTAL family deductible

i.e: policy has $100 single deductible / $300 FAMILY deductible, so if each family member had $500 claim for the year :
person 1: 500 claim - 100 deductible
person 2: 500 claims - 100 deductible
person 3: 500 claim - 100 deductible
»» $300 family deductible MET«<
person 4: 500 claim- 0 deductible —> no more deductible BC family deductible MET

55
Q

EHP co insurance

A

co insurance: % of claim ins co will pay subject to policy limits

56
Q

EHP Policy w co-ins + Deductible

A

example:

  • coverage up to $1500
  • 80% co ins
  • $100 deductible

1st claim: $800

step 1:
insurance co reimbursement:
» always deduct the deductible 1st«
800 claim - $100 DEDUCTIBLE= 700

step 2:
co ins: $700 x co ins 80%= $560 reimbursed

57
Q

Group Plan specifics

A

???

58
Q

Group plans: DIff types of groups

A
  • employers
  • trade associations
  • creditrs (i.e mortgage life ins)
59
Q

Group plans: Group Make up

A

insurers asses overall risk of GROUP by analyzing:

  • Avg age
  • olde group = higher premium
  • Gneder: women pay less for life ins but more for disability
  • nature of biz: i.e contructions workers pay more
  • comaprable businesses : looks at claims from other similar groups and uses data to assess this one
  • turnover rate: past claims statistics
60
Q

Group Plans pricing: Initial and renewal premiums for group plans (3)

A

3 main methods:

  1. Manual Method
  2. experience Method
  3. Blended Method
61
Q

Group Plans (pricing): Manual method (pooled pricing)

A
  • Prmeium for 1 group based on claims experience from another (similar) group
62
Q

Group Plans (pricing) : CLAIMS EXPERIENCE METHOD

A
  • usues groups claims experience from prior years to set renewal premiums
  • rarely used
63
Q

Group plans (Pricing): Blended Method

A
  • combination of manual and claims experience method
  • How much of each is blended depends on on the reliability of the claims statistics (i.e a small group stats not as reliable)
64
Q

Group Plans: Refund accounting (for the group)

A

if claims lower than expected == refunds part of premium to employer

claims higher == factored in to next renewal date

65
Q

Group Plans: Non Refund Accounting (For the Group)

A

if claims are lower, NO REFUND , ins co keeps all

claims higher == factored in to next renewal date

66
Q

Group Plans: Contributory plans (for the individual)

A

member (employee) must contribute to the premium

67
Q

Group Plans: Non contributory plans (For the individual)

A

member (employee) does NOT have to contribute to the premium (employee pays all)

all qualified employees REQUIRED to join

68
Q

Group Plans: Administrative Services Only (ASO)

A
  • lowers costs for VERY large companies (self insure)
  • company pays ins claims for employee deaths/ claims themselves
  • insurance co provides admin services only—>
69
Q

Group Plans: Typical forms of coverage (DEEL)

A
  • Disability Insurance
  • Extended health care Benefits
  • Employee Assistance programs (EAP)
  • Life Insurance
70
Q

Group Plans: Employee Assistance Programs (EAP)

A
  • when employees have personal probelms impacting work
    i. e depression, alcoholism, etc….

offers professional counselling

71
Q

Group Plans: Pre existing conditions

A

contract will have clause such as :

72
Q

Coordination Of Benefits

A
  • when have more than 1 ins co that can pay, clause determines which pays 1st and who pays 2nd
  • 1st paying ins co pays whatever insured entitled to
  • 2nd pays lesser of:

ETHICS (2022 LLQP) (7 decks)

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