Chapter 2

Question 1

Why are personal accident insurance contracts not contracts of indemnity?

Answer 1

Personal accident contracts are benefit policies rather than contracts of indemnity because they seek to provide a sum which is fixed in advance for certain specified events.

I.e a contract to pay a sum of money on the event of a certain contingency, irrespective of whether the insured sustains a direct financial loss.

Question 2

What are the main benefits available under a personal accident policy?

Answer 2

Policy benefits cover the following:

• Death
• Total loss of sight in one of both eyes
• Total loss of one or both limbs
• Permanent total or partial disablement
• Temporary total or partial diablement and
• Medical expenses

Question 3

When must death occur if the death benefit is to become payable under a personal accident policy?

Answer 3

Death must occur within 12 months of the date of the accident.

Question 4

What is the usual geographical scope of:

a. Accident cover
b. Sickness cover

Answer 4

a. Worldwide

b. UK, Europe, USA, Canada, Australia and New Zealand

Question 5

What are three hazardous activities that are usually excluded from an accident and sickness policy?

Answer 5

Answer should include three from the following:

• Motor cycling
• Polo
• Racing on horseback🏇 or wheels
• Winter sports or mountaineering 🗻 using ropes or guides or
• Aviation, other than air travel in a fully licensed Passenger-carrying aircraft as a passenger

Question 6

What cover is available to in-patients under medical expenses insurance?

Answer 6

• Hospital charges

- Specialist fees and additional costs