Insurance Flashcards
Acronym to describe Insurable Risks
C.H.A.D.
not Catastrophic, Homogenous exposure units, Accidental, & Determinable
Acronym for elements needed in legal contract
C.O.A.L.L
Competent parties, Offer, Acceptance, Legal consideration, & Lawful purpose
Characteristics of Insurance Contracts
Adhesion, Aleatory, Unilateral, & Conditional
What power does the National Association of Insurance Commissioners (NAIC) have over Insurance Industry?
None. NAIC provides watch lists of insurance companies based on ratio analysis. They have no regulatory power over insurance industry. Regulation is on State level.
6 Steps of Risk Management
D.I.E. Squared
Determine objectives of risk mgmt
Identify risks
Evaluate ID’ed risks’ probability & loss
Determine alternatives for risk mgmt
Implement program
Evaluate, monitor, & review
When must an insurable interest exist for property insurance claim?
At policy inception and at time of loss
When must an insurable interest exist for life insurance claim?
At policy inception only
Describe Express, Implied, & Apparent Authority.
Express is agreement between company & agent.
Implied is based upon appearance such as business cards, letterhead, company sign, etc.
Apparent is when no actual authority exists at all.
What are the 5 dividend options for insurance?
C.R.A.P.-O
Cash option, Reduce premiums, Accumulate at interest, Paid-up additions, & One yr term
What are the 3 Nonforfeiture Options for Life Insurance?
Cash Surrender
Reduced Paid-up Insurance
Extended Term Insurance
What year was taxation treatment for annuity payments changed from LIFO to FIFO?
1982
What is the time of coverage through COBRA for reduction in hours and/or normal termination?
18 months. All other scenarios or events are 36 months of coverage
In terms of Property & Casualty for Homeowners Insurance, which part of the insurance is identical?
Section II, Liability & Medical Payments are identical.
Is a family member covered under Part A (Liability Coverage) for a Personal Auto Policy when operating 1.) Your covered auto, 2.) Rented auto, 3.) Borrowed car, 4.) Replacement car after 31 days
1.) Your covered car YES
2.) Rented auto YES
3.) Borrowed car YES
4.) Replacement car after 31 days NO, you must notify insurance company within first 30 days of buying new car.
How much does a retiree’s Social Security benefit increase by (in simple interest) each year they delay their benefit?
8%
Decreases by 5/9 per years if retiree retires early within first 3 years, if retiree retires earlier than three years benefits reduced on additional years by 5/12 per year.
What is not covered by Medicare Part B?
-Dental care, dentures
-Cosmetic surgery
-Hearing aids
-Eye exams
How many quarters of coverage are needed for most workers to be fully insured for Social Security benefits?
40 quarters
What does someone who is receiving Social Security benefits early (i.e., age 62) have to do to receive Medicare Part A benefits?
Nothing, coverage starts automatically at age 65. No need to file separate application.
What are requirements that make a LTC policy qualified (tax-deductible)?
LTC policy is qualified if:
-no surrender value
-limited to qualified LTC services
-uses dividends to reduce future premiums or increase benefits
-meets consumer protection laws
-doesn’t pay for expenses under Medicare
What are the 6 ADLs?
B.E.D.T.T.C.
B.athing, E.ating, D.ressing, T.ransferring,
T.oileting, C.ontinence
What are the general exclusions for all Homeowners Insurance policies?
-Movement of ground (earthquake)
-Ordinance of law (loss from regulations regarding construction/demolition)
-Damage from water (floods, water from underground, sewer backup)
-War or nuclear hazard (including nuclear powerplant)
-Power failure (power plant failure causing a loss)
-Intentional Act
-Negligence
What are the different coverages for Homeowners Coverage?
Section I
Coverage A- “Attached Structures”
Coverage B- “space Between” (covers detached garages, etc.)
Coverage C- “covers my crap” (Contents)
Coverage D- “Damage so bad I can’t live here” (pays for housing elsewhere during repairs)
Section II
Coverage E- “EEEkkk I am in trouble” (liabilty)
Coverage F- “someone FELL and I owe them medical payments”
