Test 2

Question 1

Define insurance

Answer 1

Insurance offers (financial) protection against possible loss and tries to put the insured person back in the same financial position that they were in before the loss occurred.

Question 2

Define the term insurance policy

Answer 2

An insurance policy sets out details of the types of losses covered and the amount of compensation to be paid.

Question 3

Define the term compensation

Answer 3

Compensation is a financial payment made to an insured person if they suffer an insured loss.

Question 4

Define the term premium

Answer 4

A premium is the amount paid by the insured person to an insurer in return for providing insurance cover for a particular risk.

Question 5

Define the term excess policy

Answer 5

The policy excess is the amount the insured person must pay for any loss or damage to the insured item. The insurance company pays the rest.

Question 6

Define the term utmost good faith

Answer 6

The person seeking insurance must provide all relevant details and be truthful. Eg drivers must inform company if they have penalty points as it increases the degree of risk

Question 7

Define the term insurance interest

Answer 7

The insured must benefit financially from the items existence and suffer financially from its loss.eg if your house burns down to the ground it effects you and if it happens to your neighbours it’s them who suffer

Question 8

Define the term indemnity

Answer 8

The insured cannot make a profit from insurance. If underinsured the average clause formula is used to calculate the fraction of compensation they are in tilted to.eg. A person can’t make a 50000 euro claim if the cost was only 30000

Question 9

Define the term contribution

Answer 9

If the person is insured by two or more insurance companies and makes a claim the compensation to be paid will be split between them.eg. If you lose a ring 2 companies will share pay the value if you are under 2 policies

Question 10

Define the term subrogation

Answer 10

Once the insurance company pays the claim they take legal rights and the insured cannot sue for damages.eg. If the insured car was stolen and compensation is paid and it is later found it then belongs to the insurance company

Question 11

Define the term loading

Answer 11

It is an extra amount added to the basic premium to cover increased risks

Question 12

Define the term a no claims bonus

Answer 12

It is a discount on an insurance premium. It rewards the insured party for not making any claims on the policy

Question 13

Define the term actusey

Answer 13

It is a person hired by an insurance company to calculate all the premium

Question 14

Define the term asesor

Answer 14

A person hired by an insurance company to calculate all the compensation

Question 15

What is a claim form

Answer 15

It is a slip you have to fill out to your insurance company if you want to make a claim

Question 16

Define the term quotation

Answer 16

A quotation is a written document that a seller sends to a potential buyer that shows the price of the goods and any terms of sale.

Question 17

Define the term average clause

Answer 17

The average clause applies in the case of underinsurance and partial loss, based on the principle of indemnity.

Question 18

What is comprehensive insurance

Answer 18

Comprehensive benefits all parties and vehicles that suffer loss or injury in an incident, including the insured person and their vehicle.

Question 19

Define the term critical illness cover

Answer 19

In the event of a serious illness, this cover pays out a tax-free sum of money if you are medically diagnosed with one of the serious illnesses or disabilities that your policy covers. An example is a heart attack.

Question 20

Define the term endowment policy

Answer 20

Endowment policy pays a guaranteed amount on a specified date or, if it occurs sooner, on the death of the insured person.

Question 21

Give me a definition for exclusions

Answer 21

Exclusions are specific items or risks that are not insured.

Question 22

What is the definition of health insurance

Answer 22

In the event of serious illness or accident, health insurance covers the cost of hospital care and some medical bills. It can provide cover for a hospital stay and operations.

Question 23

Define the term holiday/travel insurance

Answer 23

If something unfortunate happens to the insured person while they are on holiday or travelling, they will be covered. Eg if they lose there suitcase or get into an accident

Question 24

What is home insurance

Answer 24

This covers the building and the contents in the event of fire, flood, storm or accidental damage. It provides compensation if the structure of the building is damaged or furniture and personal belongings

Question 25

What is income protection insurance

Answer 25

If you have to take time off work or lose your employment due to disability, illness or injury, this insurance will pay part of your income. The benefit is paid out for a certain period of time.

Question 26

Define the term life assurance

Answer 26

A life assurance policy pays out when the insured person dies, not if they die.

Question 27

Define the term insurance broker

Answer 27

A broker helps households and individuals to get the insurance that best fits their needs and their budget. Insurance brokers search the market to find the best policy and price for their client.

Question 28

Define the term agent

Answer 28

An agent sells policies on behalf of only one insurance company.

Question 29

What is mortgage protection insurance

Answer 29

In the event of the death of the insured during a mortgage repayment term, this type of life insurance policy repays their mortgage. The cover lasts until the mortgage is paid off.

Question 30

Define the term motor insurance

Answer 30

Motor insurance is compulsory in Ireland. This means that it is required by law and it is a criminal offence to drive without motor insurance. It is insurance on cars

Question 31

Give me a definition for PRSI

Answer 31

By law, all employees must pay employee PRSI. It entitles the worker to Illness, Disability, Maternity or Jobseeker’s Benefit, should they require them. Unlike other forms of insurance, this is paid to the government instead of an insurance company.

Question 32

Define the term payment protection insurance

Answer 32

Your repayments on a loan for a certain period of time (usually one year) will be covered with PPl if you suffer from an accident, illness, death or compulsory redundancy.

Question 33

Give a definition for the term personal accident insurance

Answer 33

The insured person is covered in the event of an accident, for example falling and breaking your tooth. In this case the insurance company may pay compensation to cover emergency dental treatment.

Question 34

What is a proposal from

Answer 34

This is an application form that should be filled out by the person seeking insurance cover. It must be completed truthfully, disclosing all relevant information.

Question 35

Define the term material fact

Answer 35

A material fact is anything that is likely to change the decision to grant insurance or to affect the level of premium charged.

Question 36

What is a renewal notice

Answer 36

Insurers will send a renewal notice when your policy is due for renewal. At that time, it is always worth shopping around for a new deal, as you may be able to get the insurance more cheaply from another company.

Question 37

What is a risk

Answer 37

Risk means how likely a person is to make a claim and how costly any claim is likely to be.

Question 38

What is a fixed time period

Answer 38

For a fixed time period (usually the duration of a loan or mortgage). If the insured person dies during the term of the loan or mortgage, any outstanding amount is paid off. The cover finish once the mortgage/loam is repaid.

Question 39

Define the term third party insurance

Answer 39

Third party insurance is the only one you have to have by law. It covers Injury to another person or damage to another person’s car or property caused by the insured driver. It does not cover the policy holder or their vehicle.

Question 40

Define the term third party insurance fire and theft

Answer 40

As per third party, plus compensation for the insured person if their vehicle catches fire or is stolen.

Question 41

Define the term under insurance

Answer 41

Underinsurance means that the insured item has not been insured for its full replacement value. This might be because the policy holder does not know the value or because they are trying to save money on their premium.

Question 42

What is meant by the term uninsurable risk

Answer 42

some risks are uninsurable. In general, it is not possible to insure a risk where the insurer cannot work out the chances of a loss occurring. For example, you can’t insure against failing an exam or making a business loss.

Question 43

Define the term whole life policy

Answer 43

Pays compensation on the death of the insured person.

Question 44

Explain the what a write off is

Answer 44

An insurance write-off means that the cost of repairing the damaged item is greater than the Item’s replacement value.