Module 8

Question 1

Disability Insurance

Answer 1

Protects against the risk of a serious illness or accident that would render the insured incapable of self care or of full employment. Important because over 50% of disabilities over a year. Should be 60 to 80% of gross income

Question 2

Critical illness insurance

Answer 2

Either pays a lump sum or provides income if diagnossed with a critical illness. The policy will pay out even if you subsequently make a full recovery and you have full discertion over how to use the money

Question 3

Long term care insurance

Answer 3

th insured pays a lump sum or continuing premium and the insurance pays all or some of the cost of long term care. They are 3 types of long term care insurance

Question 4

3 types of long term care insurance plan

Answer 4

1) Income plan
2) Reimbursement
3) Indemnity plan

Question 5

Income plan (long term care insurance)

Answer 5

Predetermined weekly benefit which you are free to use for whatever long term care service you wish

Question 6

Rembursement (long term care insurance)

Answer 6

Must submit proof that you received care covered under the plan

Question 7

Indemnity Plan (Long term care insurance)

Answer 7

Receives a predetermined daily benefit if you can prove you received covered service

Question 8

Property insurance

Answer 8

Insures physical property against damage theft or destruction

Question 9

Home insurance

Answer 9

Protects the family against the risk of loss, damage or destruction of the home, its related out buildings and its content. It also coveres liability to a third party for injury suffered on the property. There is no standard insurance policy

Question 10

What are the 2 types of valuation of home content (insurance)

Answer 10

• Depreciated Value

- Replacement Value

Question 11

Depreciated Value ( home valuation)

Answer 11

The item is valued at replacement or repare of the item in the condition it was when it was lost or damaged

Question 12

Replacement Value (Home valuation)

Answer 12

The cost of buying a new item of the same quality. If the insured wishes not to replace at depreciated value only

Question 13

Replacement value of the home

Answer 13

It is the home structure which is everythins except land and fondations. Some insurance company set the amount of the mortgage = the home insurance

Question 14

80% rule ( home insurance)

Answer 14

Most insurance will not cover full loss on partial damage unless the insured has bought anough insurance to cover at least 80% of the home’s replacement value

Question 15

Infaltion protection provision (home insurance)

Answer 15

Automaticaly increase the coverage each year in accordance to an inflation index

Question 16

Deductible

Answer 16

Portion of the claim that must be paid by the insured. The higher the deductible the lower the premium. Also waiting period in a disability insurance

Question 17

What are the 3 types of risk an automobil insurance coveres for?

Answer 17

1) Injury or death to the owner and pasangers
2) Damage, destruction or theft of the veicule
3) 3rd party liability for injury, death or damage to property

Question 18

8 Types of Auto insurance

Answer 18

• Liability Insurance
• Collision coverage
• Comprehensive Coverage
• Medical Payment Coverage
• Uninsured Motorist Coverage
• No fault Insurance
• Loss of Use
• Rental Car insurance

Question 19

Liability Insurance (auto)

Answer 19

Covers injury death or damage to the property of other persons

Question 20

What are the 2 types of liability insurance (Auto)

Answer 20

• Bodily injury Coverage

- Property Damage Coverage

Question 21

Bodily Insurance Coverage (Auto/liability insurance)

Answer 21

Covers owners and persons using the car with the owner’s permision for injury or death of other people

Question 22

Property Damage Coverage(Auto/Liability)

Answer 22

Covers damage your car causes to someone else’s property if you are at fault

Question 23

Colision Coverage (auto)

Answer 23

Pays only the depreciated value of the car if you are at fault

Question 24

Comprehensive Coverage (Auto)

Answer 24

Pays the depreciated value of the car for damages resulting from non accidents

Question 25

Medical payment coverage (auto)

Answer 25

Pays the medical cost for the owner and pasangers if you are at fault

Question 26

Uninsured Motorist coverage (auto)

Answer 26

Covers owner + family for injuries caused by drivers with no insurance

Question 27

No-fault Insurance (Auto)

Answer 27

Allows you to collect insurence from your insurance company even if the accident is someone else’s fault

Question 28

Loss of Use insurance (Auto)

Answer 28

Provides you with a rental car in the event of an at fault accident

Question 29

Rental car insurance

Answer 29

Covers primary risks you would normaly face on a rental vehicle

Question 30

Waiting period or elimination period (disability insurance)

Answer 30

The period from the start of the disability to the time when the benefits begin under the policy. The shorter the period the higher the premium