Insurance Flashcards
What is insurance
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
What are the steps involved in taking out insurance
- 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
what is life insurance
- 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
home insurance
buildings and contents
Motor insurance
*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
What are the five principles of insurance
Insurable interest utmost good faith indemnity subrogation contribution
What is insurable interest
To have insurable interest in an item you must benefit its existence and suffer financially from its loss
What is utmost good faith
You must tell the truth and give all relevant information when filling out the proposal form
What is idemity
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
What is subrogation
Stolen property which is recovered after the compensation has been paid belongs to the insurance company
What is contribution
If an item is insured with more than one insurance company,any compensation which has been paid will be shared between each insurance company
What is an insurance broker
Tries to find you the best insurance deal
What is an insurance agent
Sells insurance for one company
What is a proposal form
Application form for insurance
What is a premium
Amount payed to insurance company to look after risk
What is an insurance policy
Written document from the insurance company detailing all the risks covered
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What is a certificate of insurance
Written summery of the main point of the insurance policy
what is a cover note
Letter sent by insurance as proof of insurance while insurance policy is being created
What is a renewal note
Written reminder from insurance company to pay next ears premium
What is days grace
extra days cover is given by the insurance company until next premium is payed
What is surrender value
The value of life assurance policy when it is turned into cash
What is a no claims discount
no claims leads to a discount in the next years premium
