Personal Insurance/Assurance

Question 1

Premium

Answer 1

-money you pay to buy insurance

Question 2

Compensation

Answer 2

-money the insurance company pays to you if you suffer a loss

Question 3

Insurer

Answer 3

The insurance company

Question 4

Insured

Answer 4

The person getting insurance

Question 5

Broker

Answer 5

Gives advice and sells insurance

Question 6

Actuary

Answer 6

Calculates the premium

Question 7

Loss adjuster

Answer 7

Calculates the value of the loss-works for insurance company

Question 8

Loss assessor

Answer 8

Calculates the value of the loss-works for the insurance

Question 9

Proposal form

Answer 9

The form a person can fill to apply for insurance

Question 10

Certificate of insurance

Answer 10

• you recieve this when you pay premium

- it details what is and is not covered

Question 11

Cover note

Answer 11

-given if delay in sending the certificate of insuarance

Question 12

Policy

Answer 12

-gives details of conditions and exclusions to the insurance

Question 13

Claim form

Answer 13

The form you full in to seek compensation

Question 14

Insurance interest

Answer 14

-benefit from it’s exhistance, suffer from it’s loss

Question 15

Utmost good faith

Answer 15

• most answer the proposal form truthfully

- must give the company material facts regarding the item

Question 16

Indemnity

Answer 16

• must recieve 100% of loss’ worth

- no profit should be made by the insured

Question 17

Subrogation

Answer 17

-should the compensated item become available again

‘-> you keep the money OR the item

Question 18

Contribution

Answer 18

Cannot receive 100% compensation from TWO companies

Question 19

If under insured you use ______

Answer 19

The average clause:

Loss suffered X insured amount
___________________________________
Current market Value Of Item

Question 20

Non-insurance risks

Answer 20

• natural disasters
• bad-management decisions
• legal changes
• bankruptcy
• stock going out of date

Question 21

Stock

Answer 21

Term used to describe goods that a shop has for sales

Question 22

Why do we need adequate insurance?

Answer 22

• covers ALL risks
• ensures we will be compensated for the mRket value
• failure to adequately insure will lead to under insurance and a reduction in compensation received

Question 23

Third party insurance

Answer 23

• required by law

- covers the other person’s property damage

Question 24

Third Party Fire and Theft Car Insurance

Answer 24

• cover’s other person’s damage
• covers if your car was set Alight
• covers if your car was stolen (/from)

Question 25

House insurance

Answer 25

Protect if your home is damaged

-will not cover contents of the house

Question 26

Content’s insurance

Answer 26

-protects the contents of your home

Question 27

Mortgage protection

Answer 27

Will clear your mortgage if you die/if you are unable to work

Question 28

Personal insurance

Answer 28

• medical health insurance
• salary protection insurance
• mobile phone insurance
• pay related social insurance
• travel insurance

Question 29

Life assurance:

Term policy

Answer 29

-insurer pays a lump sum if the insured dies before an agreed date

Question 30

Whole life policy

Answer 30

Expensive premium because the money will have to be paid out

Question 31

An endowment policy

Answer 31

• taken out for an agreed amount of time
• if they die before the maturity date then a lump sum is paid out
• or, money wil be paid out regardless of death
• only can a,so be gotten before the maturity date, this is called the ‘surrender value’

Question 32

Loadings

Answer 32

• cost added to premium because there is an increased chance the insured will take out compensation
• eg. Smoker, prone to flooding

Question 33

Reductions

Answer 33

-reduced cost of the premium because there is a reduced risk of insured taking out compensation

Eg. Home: fire alarms, smoke alarms, house alarms,
Eg. Motor: seat belts, full points, car alarms
Eg. Personal: exercise, no smoking

Question 34

No claims bonus

Answer 34

-reduced cost as you have never claimed against your insurance policy

Question 35

Policy excess

Answer 35

-the value of the risk that the insured person has to pay/incur before compensation is paid out

Question 36

Insurance

Answer 36

Protects you against a financial loss that MIGHT happen