Introduction

Question 1

What is insurance?

Answer 1

A form of financial protection provided by insurance companies against something that might happen e.g. illness or damage to property

Question 2

What does the term assurance mean in relation to insurance?

Answer 2

Protection against something that will happen

Question 3

What is a premium?

Answer 3

A specific amount paid by individuals to an insurance money in order to take out an insurance policy

Question 4

What is an insurance policy?

Answer 4

A written document detailing the terms and conditions of the insurance being taken out by an individual

Question 5

What is a policyholder?

Answer 5

An individual who has taken out an insurance policy

Question 6

Explain how insurance works.

Answer 6

A large number of individuals pay premiums to insurance companies which creates a pool of money which is used by an insurance company to pay compensation to policy holders to cover financial loses

Question 7

How does one receive compensation?

Answer 7

They must make a claim asking for payment based on the terms of the insurance policy

Insurance claims are reviewed for validity and paid out to the policyholder or their family once they are approved