Chapter 7 - Critical Illness Insurance Flashcards
Which do people usually prioritise higher critical illness or income protection
Income protection
When claiming on the critically on this policy, if a client inadvertently failed to mention some treatment she had received, which then led to the illness. What would the provider do?
Play the claim, but reduce the payment proportionally
What is the benefit from paying for critical illness cover under an employer group policy?
Reduced underwriting makes it simple to purchase
Where are critical illness cover is added to a unit linked life policy. The mobility risk premium is usually paid for by.
The cancellation of units
Critical illness cover can be extended to cover the policyholders children in this case, what is the primary benefit?
Typically, no additional underwriting is required
When setting up a critical illness policy that includes a separate life cover element, what is the most ideal trust to place the policy in?
Split benefit, trust
What level of medical underwriting is required when using the buyback option of an combined life assurance and critical illness policy, even when they are technically uninsurable
Zero medical underwriting
Will a critical illness policy that pays regular instalments, instead of a lump sum, be cheaper or more expensive premium wise
Cheaper than the lump sum 
What is the benefit of a split trust?
What a life policy includes a critical illness cover, generally split trust would be used. This separates the life increase of Elvis elements, recognising that, in the event of a suffering critical illness, the settler is likely to want the benefits themselves rather than have them paid to a third-party.
Essentially, the benefit is that the settler will get the benefit as opposed to a third-party 
Describe the relationship between guaranteed premiums and reviewable premiums
Guaranteed premiums are essentially proving to remain constant throughout the life of the contract, whereas reviewable premiums are periodically, reviewed in light of the insurance, overall claims history
Due to this guaranteed freedom to tend to be much higher, often twice as much as the cost of renewable premiums at the outset 
What is severity based cover in critical illness
Additional payments to be made if I disease progresses beyond particular stage
A client has a combined life insurance in critical illness policy. What will happen to the sum assured on death if she makes a claim on the diagnosis of a critical illness
Not exist as the policy has paid out an accelerated death payment
Where are employer takes out group critical illness cover for their employees, a claim will usually only be paid where the employee survives for how many days after diagnosis
30 days
Under a reviewable basis, what is the new rate based on when the reviews are undertaken?
Claims experience of the insurer
There is no set survival period specified in the API best practice, however, what would be the typical range of survival periods for critical illness cover?
14 to 30 days
