Insurance

Question 1

What is insurance

Answer 1

Insurance is a written promise by am insurance company to a person who has suffered a loss
Insurance involves the ‘pooling of risks’.Pooling of risks is where a large number of people pay a small fee to an insurance to form a fund, out of which,those who suffer a loss will receive compensation

Question 2

What are the steps involved in taking out insurance

Answer 2

• Calculate the value of the item being insured
• Contact an insurance company or insurance broker
• Complete the insurance proposal form
• Pay the premium-fee for insurance
• Receive the insurance policy an the certificate of insurance

Question 3

what is life insurance

Answer 3

• endowment-A way of saving.If the insured person reaches a certain age they can cash in their policy
• Temporary life insurance -life assured for a certain fixed length of time

Question 4

home insurance

Answer 4

buildings and contents

Question 5

Motor insurance

Answer 5

*third party -minimum insurance must be taken out it looks after the third person involved
*Third person fire and theft.Looks after the theft or fire of your vehicle and the third person involved
*Comprehensive.Most expensive type of insurance.Looks after everything
Personal insurance.Health insurance,salary protection insurance,personal accident insurance and universal social charge

Question 6

What are the five principles of insurance

Answer 6

Insurable interest
utmost good faith
indemnity
subrogation
contribution

Question 7

What is insurable interest

Answer 7

To have insurable interest in an item you must benefit its existence and suffer financially from its loss

Question 8

What is utmost good faith

Answer 8

You must tell the truth and give all relevant information when filling out the proposal form

Question 9

What is idemity

Answer 9

You can not make a profit from insurance

You should be placed in the same financial position after the loss as you were before the loss occurred

Question 10

What is subrogation

Answer 10

Stolen property which is recovered after the compensation has been paid belongs to the insurance company

Question 11

What is contribution

Answer 11

If an item is insured with more than one insurance company,any compensation which has been paid will be shared between each insurance company

Question 12

What is an insurance broker

Answer 12

Tries to find you the best insurance deal

Question 13

What is an insurance agent

Answer 13

Sells insurance for one company

Question 14

What is a proposal form

Answer 14

Application form for insurance

Question 15

What is a premium

Answer 15

Amount payed to insurance company to look after risk

Question 16

What is an insurance policy

Answer 16

Written document from the insurance company detailing all the risks covered
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Question 17

What is a certificate of insurance

Answer 17

Written summery of the main point of the insurance policy

Question 18

what is a cover note

Answer 18

Letter sent by insurance as proof of insurance while insurance policy is being created

Question 19

What is a renewal note

Answer 19

Written reminder from insurance company to pay next ears premium

Question 20

What is days grace

Answer 20

extra days cover is given by the insurance company until next premium is payed

Question 21

What is surrender value

Answer 21

The value of life assurance policy when it is turned into cash

Question 22

What is a no claims discount

Answer 22

no claims leads to a discount in the next years premium