Chapter 13 - Insurance Flashcards
What are the 6 steps involved in taking out insurance?
- Calculate value of the item
- Contact an insurance company/broker
- Complete a proposal form
- Pay premium
- Company sends out insurance policy and certificate of insurance
- Receive renewal note
Insurance broker
Person who works for themselves and sells insurance for a number of different companies. Works on commission
Insurance agent
Works for one insurance company. Gets a basic salary and commission
Proposal form
Application form for insurance
Insurer
Providing insurance company
Premium
Fee paid for insurance
Insurance policy
Written document from insurance company containing all the details of the insurance contract
Insured
Person who took out insurance
Certificate of insurance
Short, written summary of the main points of an insurance policy
Cover note
Letter sent by the insurance company proving insurance is in place
Renewal notice
A written reminder from the insurance company saying the next premium must be paid
Grace period
A period of time when you have not yet payed your next premium but you are still insured
What is life assurance?
Insurance to pay bills should one of the household’s income earners die
What is endowment assurance
Special policy used as a way of saving. Works the same as normal life assurance but when the person reaches a certain age they cash in the policy themselves
Surrender value
Value of life assurance when turned into cash
What is temporary life assurance?
Insurance taken out on a loan incase you should die before fully repaying the loan
Describe home insurance
- Has two parts: building and contents insurance
* Cost of premium could be reduced due to alarms, window locks, neighbourhood watch ect
Third Party Fire and Theft
Minimum type of car insurance. If you have an accident, the insurance company will only pay for the other persons injuries and damage. However you do get compensation if your car is stolen or damaged by fire
Comprehensive car insurance
- Most expensive
* Everyone in the accident is covered
No claims bonus
A discount on your car premium if you had no accidents in the last year
Health insurance
Pays for your hospital bills should you fall ill
Salary protection insurance
Supplies you with a monthly income in case you fall ill and can’t work
Personal accident insurance
Insurance in case you have a personal accident for example breaking a leg
PRSI
By law everyone must pay a percentage of their income into a fund. Employees will be paid a sum of money out of the fund if any of the following occur:
- Unemployment - Maternity leave and not paid by the employer - Become ill and are unable to work - Reached retirement age
Travel insurance
The insurance company will pay for any bad things that happen while you’re travelling
What are the 5 rules of insurance?
- Insurable interest
- Upmost good-faith
- Indemnity
- Subrogation
- Contribution
All risks fire ins
Covers loss or damage to property caused by fire
Consequential loss insurance
Pays for lost profits and pays for certain expenses should a business close down due to fire
Burglary/theft insurance
Owner will receive money if stock, cash or equipment is stolen
Transit insurance
In case cash or stock is stolen or damaged whilst being transported to or from the premises
Employers liability insurance
Insurance company will pay money to any employees who are injured or killed whilst working
Product liability insurance
Insurance company will pay money to any customers who were injured or killed due to faulty goods or services
Fidelity guarantee insurance
Insurance company will pay business owner if any employee steals from the firm or causes business to lose money
Insurance
Protection against something that might happen
Assurance
Protection against something that will definitely happen
Non Insurable risk
Sometimes the insurance company won’t insure something because it would cost them too much to replace
Policy excess
When you have to pay for some of the loss yourself
What does PRSI stand for?
Pay Related Social Insurance
Public Liability Insurance
Insurance company will pay money to any member of the public who is killed or injured on premises
Insurable interest
You must benefit from having the item and suffer from its loss
Utmost Good Faith
You must state truthfully while filling out a proposal form
Indemnity
You cannot make a profit from insurance
Subrogation
Say your car gets stolen and you receive compensation. If the car is found it now belongs to the insurance company. If you want it back, your must pay for it
Contribution
If you have something insured with more than one company, each company will only pay part of the compensation
