Health Protection Products Flashcards
What length policy type is Income Protection (IP)?
Long-term.
How and when is Income Protection (IP) paid?
By weekly or monthly benefits when the insured becomes unable to work because of illness or incapacity.
What is another term for Income Protection?
Permanent health insurance (PHI).
Between what ages must an individual be to take out Income Protection?
18-60
When is the latest date that Income Protection cover would be in place until?
The insured’s 70th birthday.
What is the name of the waiting period during a claim before a benefit is payable?
The deferred period.
What are the most common deferred periods for IP?
4, 13, 26 or 52 weeks.
How are benefits payable for Income Protection in terms of tax?
Free of tax on individual policies and as salary, subject to income tax and NICs for group schemes.
What are the names of the TWO benefits in place to encourage claimants to return to work in whatever capacity they are able?
- Rehabilitation benefit.
2. Proportionate benefit.
What are the THREE main policy types for income protection?
- Standard policies.
- Day one and back to day one cover.
- Group schemes.
What percentage of pre-claim income is the benefit usually limited to for a standard income protection policy?
50-60%
What percentage of pre-claim income is the benefit usually limited to for income protection group schemes?
75%
What is the reason for the underwriting of IP to be very different and more exacting than that of life insurance?
Because the chances of being too ill to work are much greater than the chances of dying.
What is moribidity?
The probability of sickness.
What are the SIX personal factors an underwriter will look at to determine premiums?
- Age.
- Health.
- Smoking
- Occupation
- Hobbies and pursuits.
- Deferred period.
What are the THREE high-level categories of cover that Income Protection is based around?
- Own occupation
- Suited occupation
- Any occupation
What is the name of the category of cover for IP that will pay out if the individual is unable to perform their current role/occupation?
Own occupation.
What number occupation class are managerial, executive, clerical, administrative and professional workers?
Class 1
What number occupation class are shop workers, skilled light manual workers in non-hazardous jobs, hotel and catering workers?
Class 2
What number occupation class are skilled workers in non-hazardous manual jobs?
Class 3
Skilled workers in hazardous jobs and heavy manual workers?
Class 4
Which type of occupation class poses the most risk and therefore will be subject to higher premiums?
Class 4
What are the THREE different policy term types in relation to Income Protection?
- Guaranteed
- Reviewable
- Renewable
What type of policy term sees that premiums remain constant throughout the life of the contract?
Guaranteed.
In relation to Income Protection, what is incapacity defined as?
An inability to work due to illness or injury.
Upon making a claim for income protection, why may an insurer ask for evidence of earnings prior to sickness?
To make sure that the level of benefit does not exceed the maximum payable benefit.