Unit 1 Topic 10 Flashcards
What is a benefit?
A government payment made to individuals who meet specific conditions to help them meet their living expenses.
What is fronting?
A fraudulent method of lowering car insurance costs by naming a person as the main driver on a policy when they are not.
What is general insurance?
A broad category of insurance that provides protection against financial losses associated with events such as car accidents, loss of or damage to a home and its contents, problems with a holiday and vet bills.
What is health insurance?
Products used to protect against the financial loss of being too unwell to work or being diagnosed with a critical illness.
Define ‘inheritance’
The property, money, etc passed from one person to another upon death.
What is an insurance certificate?
A document issued by an insurance provider that verifies the existence of coverage for the policyholder, and offers a summary of the cover given.
What is a no claims discount?
A discount on the insurance premium that builds up for each year a person does not make a claim.
What’s a pension policy?
A product that enables people to save money for their retirement.
What is redundancy?
Losing a job because the business no longer needs, wants, or can afford that job to be done; it is related to the needs of the business and not to how well or badly an individual does their job.
Define ‘sum insured’
The maximum amount an insurance provider will pay out.
What is third-party insurance?
Insurance that covers damage that the policyholder causes to someone else (the ‘third party’) or to their property but does not cover the policyholder for any injury or loss that they suffer themselves.
Explain voluntary excess
The excess is the amount paid on any claim by the policyholder before the insurance company will pay anything. A compulsory excess is usually set by the insurance company, but consumers can opt for a higher voluntary excess in exchange for a lower premium.
Name the 4 main types of insurance
General Insurance
Life cover
Health insurance
Pensions policies
Name 4 key features of insurance
Protection against financial consequences of unexpected events
Covered by the FOS
Provided by specialist companies called insurers
Premiums
Name 4 factors that influence an insurance premium
How likely an event is to occur
The amount of money needed to fix problems if they occur
Length of time the policy will be in force
Amount of money the policy holder will pay towards repairs
What’s the % of tax charged on insurance premiums?
12%
20% for travel insurance
Name 2 details that are included in a policy document
What is covered by the insurance policy
Terms and conditions for policyholders making a claim
Name 3 areas covered by comprehensive insurance
Accidental damage to the driver’s car
Medical expenses related to an accident
Loss of or damage to personal possessions in the car, up to a stated limit
Name 3 areas to consider when choosing what motor insurance to buy
What they can afford
How much it would cost to make repairs or replace their car
Whether or not their personal possessions are covered by another insurance policy
Explain ‘pay-as-you-go’ insurance
- insurer fits telematic gps tracking device (black box)
- device records number of miles driven and driving habits in terms of speed, type of road being travelled on, time of journey and how the driver is braking + cornering
- insurer uses information to charge a per mile cost based on how safely the driver is driving, when they drive and how long for
Name 3 methods of cutting the cost of car insurance
Comparing the details of what is covered by different policies as well as the cost when shopping around
Fit an approved alarm or immobiliser as insurers offer discounts for cars that’re secure.
Paying a higher voluntary excess, as this will mean the insurer pays less on any claims made.
Only use the vehicle for social, domestic and pleasure purposes as business use increases premiums.
Build up a no-claims discount
What does buildings insurance cover the cost of?
Repairing or rebuilding a property if it’s damaged or destroyed.
What does contents insurance cover the cost of?
Belongings kept in the home that people can take with them when they move.
Name 5 events that may result in contents insurance being paid by the provider
Fire, explosion, lightning and earthquakes
Storm and flood
Theft and attempted theft
Falling trees and branches
Water escaping tanks or pipes
Name 3 methods for dealing with unexpected events
Savings
Borrowing
Benefits
How long do the MAS recommend that your emergency funds cover mandatory and essential expenses?
3 months
Name 4 things you could do with unexpected income
Save it
Create emergency fund
Spend it
Pay back borrowing
