Test 2 Flashcards
Define insurance
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.
Define the term insurance policy
An insurance policy sets out details of the types of losses covered and the amount of compensation to be paid.
Define the term compensation
Compensation is a financial payment made to an insured person if they suffer an insured loss.
Define the term premium
A premium is the amount paid by the insured person to an insurer in return for providing insurance cover for a particular risk.
Define the term excess policy
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.
Define the term utmost good faith
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
Define the term insurance interest
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
Define the term indemnity
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
Define the term contribution
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
Define the term subrogation
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
Define the term loading
It is an extra amount added to the basic premium to cover increased risks
Define the term a no claims bonus
It is a discount on an insurance premium. It rewards the insured party for not making any claims on the policy
Define the term actusey
It is a person hired by an insurance company to calculate all the premium
Define the term asesor
A person hired by an insurance company to calculate all the compensation
What is a claim form
It is a slip you have to fill out to your insurance company if you want to make a claim
Define the term quotation
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.
Define the term average clause
The average clause applies in the case of underinsurance and partial loss, based on the principle of indemnity.
What is comprehensive insurance
Comprehensive benefits all parties and vehicles that suffer loss or injury in an incident, including the insured person and their vehicle.
Define the term critical illness cover
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.
Define the term endowment policy
Endowment policy pays a guaranteed amount on a specified date or, if it occurs sooner, on the death of the insured person.
Give me a definition for exclusions
Exclusions are specific items or risks that are not insured.
What is the definition of health insurance
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.
Define the term holiday/travel insurance
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
What is home insurance
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
What is income protection insurance
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.
Define the term life assurance
A life assurance policy pays out when the insured person dies, not if they die.
Define the term insurance broker
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.
Define the term agent
An agent sells policies on behalf of only one insurance company.
What is mortgage protection insurance
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.
Define the term motor insurance
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
Give me a definition for PRSI
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.
Define the term payment protection insurance
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.
Give a definition for the term personal accident insurance
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.
What is a proposal from
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.
Define the term material fact
A material fact is anything that is likely to change the decision to grant insurance or to affect the level of premium charged.
What is a renewal notice
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.
What is a risk
Risk means how likely a person is to make a claim and how costly any claim is likely to be.
What is a fixed time period
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.
Define the term third party insurance
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.
Define the term third party insurance fire and theft
As per third party, plus compensation for the insured person if their vehicle catches fire or is stolen.
Define the term under insurance
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.
What is meant by the term uninsurable risk
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.
Define the term whole life policy
Pays compensation on the death of the insured person.
Explain the what a write off is
An insurance write-off means that the cost of repairing the damaged item is greater than the Item’s replacement value.
