Chapter 11 - Accident & Sickeness Insurance and Travel Insurance

Question 1

Identify three work-related benefits provided by Workers Compensation plans.

Answer 1

Any necessary health care costs (provides coverage for health care costs not typically covered by provincial medical plans such as prescription medication, chiropractors), necessary medical and vocational rehabilitation, Replacement for lost earnings for time missed from work, Death benefit

Question 2

Indicate who would purchase an individual Accident and Sickness insurance policy.

Answer 2

People who are good candidates include:
* Self-employed persons
* People who do not have a group plan at their place of work
* High income employees
* People seeking better coverage terms than those provided through their own group plan

Question 3

Define Disability

Answer 3

Generally a disability is a physical or mental inability to work. People can be disabled due to:
Accidents & Sickness

Question 4

Define Elimination Period

Answer 4

This is the period of self-insurance between the onset of the disability and the commencement of disability benefits. In general, the longer the elimination period the lower the premium.

Question 5

Define Benefit Period

Answer 5

This is the period for which benefits are payable. They can range from one year, two years, five years, ten years, or “to age 65”.

Question 6

Identify three types of information about the applicant which are important in determining the premium to be charged.

Answer 6

1. Type of policy
2. Applicant’s Personal Information
3. Type of benefits requested

Question 7

Identify who has insurable interest under an individual contract of Accident & Sickness insurance.

Answer 7

A person has an insurable interest in his or her own life and well-being, including that of:
- Child or grandchild
- Spouse
- Employee
- Any person in whom they have a pecuniary interest
- Any person upon whom they depend for support or education

Question 8

What is the effect on coverage when such interest is not present?

Answer 8

The contract is void if the applicant has no insurable interest at the time when the contract would otherwise take effect.

Question 9

Summarize the “Incontestability” provision.

Answer 9

Statements made on the application form a part of the policy and are incontestable after two years except for:
1) Fraudulent statements
2) Misstatement of age

Question 10

Indicate the term(s) of travel accident policies.

Answer 10

Travel accident policies can be purchased for a:
1. Single Trip - Single trip policies cover only one specific trip lasting no longer than 180 days.
2. Annual basis - An annual policy can be purchased covering an unlimited number of trips lasting for up to 30, 60, 90 or 180 days per trip depending on the option selected by the insured.

Question 11

Indicate the factors used to rate travel accident policies.

Answer 11

The premium charged will depend upon many factors including, but not limited to:
* whether it is an individual or family plan.
* single or annual policy
* the number of trips
* the duration of the trip(s)
* area of travel
* policy limits
* age & health of the individuals

Question 12

Indicate who would qualify as a dependent.

Answer 12

Children are considered dependent if they are under the age of 20 (26 if attending an accredited educational facility), unmarried, residing with and receiving full support from the applicant because of mental or physical infirmity.

Question 13

Summarize the “Pre-existing Condition” provision.

Answer 13

Coverage does not automatically extend to hospitalization or medical treatment required for any illness or injury that existed prior to the commencement of travel.
**Some policies will respond if the condition had been under control for a period of time either three or six months depending on the condition.

Question 14

Two types of Disability Income Coverage (Group Insurance)

Answer 14

1. Weekly Indemnity - short-term coverage only and payments are typically made for 13, 26, or 52 weeks.
   . Long Term Disability - Eligibility for LTD benefits starts at the end of the Weekly Indemnity benefit period and could continue as long as required, often up to age 65. If insured is still disabled and still qualifies under the definition of the policy.
2. Group Insurance

Question 15

Group Insurance
Optional coverages

Answer 15

i) Major Medical (Extended Health Care)
- prescription drugs, difference between standard ward care & semi-private or private room hospital accommodation, special duty nursing costs, local ambulance costs, Prosthesis limbs or implants, vision care, paramedical services, employee counselling
ii) Dental Plan
iii) Accidental Death & Dismemberment

Question 16

Sickness is the leading cause of disabilities. TRUE or FALSE

Answer 16

TRUE - As they become older, the number of people disabled due to sickness far exceeds those disabled due to accident.

Question 17

Role of workers compensation plans re: accident & sickness claims.

Answer 17

To provide medical treatment and salary protection for employees in the case of a work-related injury or occupational disease.

Question 18

Benefits provided under provincial workers compensation plans.

Answer 18

Generally, provincial legislation requires that employers in certain industries, participate in the workers compensation plan. All premiums to support the plan are payable by employers only and will vary according to the degree of occupational risk.

Question 19

Individual Accident & Sickness Insurance

Answer 19

Individuals can purchase their own Accident & Sickness Insurance contracts. Good candidates would be self-employed persons, people that do not have a group plan at their place of work, high income employees, people seeking better coverage terms than those provided in their own group plan.

Question 20

Most common type of policy.

Answer 20

The Disability Income policy is the most common individual Accident & Sickness Insurance policies. It is specifically designed to provide a monthly income to the insured during a period of disability that is caused by sickness or accident.

Question 21

Own Occupation vs. Any Occupation coverage

Answer 21

1. Own Occupation Coverage: treat claimants as disabled once their condition prevents them from carrying out the duties associated with the role they had immediately prior to the onset of their claim. So, even if they’re capable of working in another position, they’ll be able to file a successful claim as long as their doctor confirms you can no longer do the tasks associated with your previous occupation.
2. Any Occupation Coverage: In these policies, there is no benefit payable if the insured is able to engage in any occupation for which they are reasonably fitted by education, training, experience or income.

Question 22

Characteristics of Individual Accident & Sickness Insurance contracts.

Answer 22

1. Application Forms Part of Contract
2. Insurable Interest Required
3. Incontestability
4. Unpaid Premiums