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Business - 003 Personal and Business Finance > A.4 (part c) Insurance > Flashcards

A.4 (part c) Insurance Flashcards

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1
Q

What are the six different types of insurance?

A
  1. Car
  2. Health
  3. Home and contents
  4. Life assurance and insurance
  5. Travel
  6. Pet
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2
Q

What is insurance?

A

Something that’s taken out against anything deemed to have a worth or where there is a risk of financial loss. You pay monthly or annually to protect an item.

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3
Q

What are premiums?

A

Regular payments made by an individual, to an insurance provider in return for protection.

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4
Q

What is excess?

A

The initial amount that you need to pay before your insurance provider will provide the ‘pay out’ you are claiming for.

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5
Q

What are the three different types of car insurance?

A
  1. Third party
  2. Third party fire and theft
  3. Fully comprehensive
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6
Q

What is third party car insurance?

A

The minimum legal level of cover needed to drive a car. It covers you if you damage someone’s else’s property or injure them while driving.

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7
Q

What are the advantages of third party car insurance?

A
  1. Cheaper than others
  2. Easy and quick (doesn’t require inspection)
  3. Suited to people who’s car is older and cheaper to repair
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8
Q

What are the disadvantages of third party car insurance?

A
  1. Have to pay for your own medical or legal costs if needed
  2. If you caused the accident, you are not covered
  3. If your car is stolen, damaged or destroyed by fire, you are not covered
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9
Q

What is third party fire and theft car insurance?

A

If the car accident is your fault, this insurance will cover any damage you caused to the other person and their property. It will also pay out if your car is stolen or damaged in fire.

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10
Q

What are the disadvantages of third party fire and theft car insurance?

A
  1. You are not covered for your own vehicle if you are involved in another accident, just the other person’s
  2. Your claim may be denied if your car was stolen but hadn’t been properly secured
  3. If your car is damaged in a fire that was caused by electronic failures, or breakdowns, then your claim may be denied
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11
Q

What is fully comprehensive car insurance?

A

Highest level of car insurance. Provides coverage for you and your vehicle as well as other road users.

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12
Q

What are the advantages of fully comprehensive car insurance?

A
  1. You are covered if any accidental damage caused by negligence occurs
  2. You are covered if you have any personal injuries that result from an incident involving your vehicle where you are at fault
  3. You get courtesy cars while yours is being replaced
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13
Q

What are the disadvantages of fully comprehensive car insurance?

A
  1. You are not covered if you are under the influence
  2. Price is higher than collision insurance
  3. If the risk of you needing this type of insurance is low, it is a waste of money
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14
Q

What is health insurance?

A

Most UK residents are entitled to free healthcare from the NHS. Health insurance pays all or some of your medical bills if you’re treated privately.

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15
Q

What do you need health insurance for?

A
  1. You would prefer not to wait for NHS treatment
  2. Prefer private hospitals
  3. You want to be covered for drugs and treatments you can’t get on the NHS
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16
Q

What are the advantages of health insurance?

A
  1. Specialist referrals
  2. Get whatever scans you want
  3. Reduces waiting time
  4. Choose your surgeon and hospital
17
Q

What are the disadvantages of health insurance?

A
  1. Expensive
  2. Most of the treatment is available on the NHS anyway
  3. Your treatment options may not be local
  4. Private hospitals often have no A&E department
18
Q

What is home insurance?

A

Covers the cost of repairing damage to the structure of your property.

19
Q

What is contents insurance?

A

Covers you against loss, theft or damage to your personal and home possessions. It can also cover you if you take items out of your home, on holiday for example.

20
Q

What is life insurance?

A

A type of police that protects your loved ones financially when you die. It can help minimise the financial impact that your death could have on your family. They are taken out for a set period of time which usually lasts between five and thirty years. You pay a set amount each month or year.

21
Q

What is life assurance?

A

An assurance that you eventually earn a payout.

22
Q

What are the advantages of life insurance?

A
  1. Provides peace of mind for you and your loved ones

2. Is the most affordable way to protect your family in the event of your death

23
Q

What are the disadvantages of life insurance?

A
  1. Pays out only if you die within the specified term of the policy
  2. If you still want cover after the policy expires, you have to apply for cover again
  3. The older you are when you take out the insurance, the more expensive the premiums are likely to be
24
Q

What are the advantages of life assurance?

A
  1. Provides peach of mind for you and your loved ones
  2. Pays out regardless of your death
  3. Sometimes offered as an investment product
25
Q

What are the disadvantages of life assurance?

A
  1. Can be expensive

2. Some insurers expect you to continue to pay regular monthly premium throughout your lifetime

26
Q

What is travel insurance?

A

It can compensate you in a number of different ways, compensating you if your flight gets delayed or cancelled, if your luggage gets lost, or if you have expensive items such as cameras or laptops stolen while you are on holiday. Also covers hospital costs if needed on holiday

27
Q

What are the advantages of travel insurance?

A
  1. Protects against holiday cancellations and sometimes delays
  2. Provides protection for personal belongings away from home
  3. Not a legal requirement
  4. Covers medical costs when on holiday
28
Q

What are the disadvantages of travel insurance?

A
  1. May not be used
  2. Not a legal requirement
  3. Additional cost when travelling
29
Q

What is pet insurance?

A

Helps you cover the cost of veterinary treatment if your pet falls ill or gets injured. Some insurers providers also pay out if your pet dies, is lost or stolen or causes damage to a third party’s property.

30
Q

What are the advantages of pet insurance?

A
  1. Saves money and heartache in the long run
  2. Peace of mind
  3. Veterinary treatment can add up without insurance
31
Q

What are the disadvantages of pet insurance?

A
  1. Expensive
  2. A waste if you don’t use it
  3. Additional costs on top of pet funds

Business - 003 Personal and Business Finance (16 decks)

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