Products Flashcards
What should a pure endowment be used for? 2 examples
Savings
Repayment of loan
Lump sum on retirement
What should an endowment assurance be used for?
What about group endowment?
Savings on living, protection for dependants on death
Retirement benefits for staff on living, death in service for staff who die
What might a whole of life assurance be used for? Give 2 examples
Long term protection to dependants
Funeral expenses, tax liabilities on death
Why is term cheaper than end assurance and WOL?
It won’t provide a benefit in every case (survival)
What’s the purpose of a Term assurance? The example is clear.
Provide protection on financial loss of dependants
What’s the group version of a term assurance for?
Death in service
Credit card companies against their holders
Anywhere else with a risk that goods won’t be paid for on death
Key person risk
2 uses of a decreasing term?
Mortage with capital and interest repayments
Benefits for children on death until can fend for themself
Why is there a deferred period on ASU contracts?
Assumption that other resources will pay e.g. company/state
Why does a Critical illness pay a lump sum on diagnosis?
Nursing and other care
If there’s a CI rider on a WOL assurance, what does it mean?
It pays out the death benefit in advance of death
What risk do long term care contracts cover?
Need of home care or nursing home care after retirement
How might a long term care contract work (when is the payment, how is it paid)
Pay for all costs for life OR
Cash lump sum OR
Annuity contributing towards cost of care
What does indemnity mean?
Insured restored to same financial position after loss as before it (cover the costs)
What is liability insurance?
Indemnity where insured is legally liable to pay some compensation to a 3rd party. Legal expenses usually covered.
Illegal act of negligence not covered
Give 5 types of liability insurance? An some examples
Public (Marine, Aviation, Property, Motor) Motor (3rd party, fully comp) Employers liability Product liability Professional indemnity
What restrictions may there be on payout amount of liability insurance?
Max indemnity per claim Max indemnity per event An excess Illegal acts not covered Minimum cover required by legislation
Explain employers liability
Indemnify employee or his estate
Death, illness, injury, disease
Explaing motor 3rd party
Indemnify car driver again payment to other car driver/estate on death/injury/damage
Explain public liability
Indemnitiy against legal liability for death/injury/damage to proprty belonging to another person
Explain product liability
Indemnify company against payouts due to death/injury/damage to property of another person caused by product fault
What perils might a product liability insurance cover?
Faulty design/manufacture/packaging
Misleading/incorrect instructions
What is PII
Indemnify insured against compensation required from negligence in doing a service e.g. poor medical treatment, incorrect financial advice
What types of property damage insurance (loss of the property or damage to it) are there?
Residential building Moveable property e.g. contents of house Commerical buidling Land vehicles Marine craft Aircraft
What does property damage insurance INDEMNIFY against?
Damage or loss to that property
