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Insurance
| Question | Answer |
|---|---|
| Explain the difference between 'insurance' & 'assurance'? | Insurance= insuring against something that ‘might’ happen e.g. you might crash the car; Assurance = insuring against something that ‘will’ happen e.g. you will retire and will experience death. |
| Oultine 2 types of 'Life Assurance' | 1. Whole life Assurance:Pay money into the policy for the whole of your life. 2. Endowment: pay money into a policy for a set period of time e.g.10 Year Endowment Policy. |
| Give examples of 'Insurable Risk' | Something you can insure against e.g. car crash |
| Give examples of 'Non Insurable Risk' | Something you cannot insure against e.g. a house in a tornado alley |
| Name steps involved in taking out insurance | 1. Get quote from company or 'broker' 2. Complete 'proposal form' 3. Pay Premium 4. Receive 'Policy' and 'Certificate of Insurance' |
| Outline the role of the 'Insurance Broker' | Middle man who deals with a variety of insurance companies to get you the best policy. You pay a fee called a ‘brokerage’. |
| Outline the role of the 'Assessor' | The assessor puts the value on the damage done in an accident. |
| Outline the role of the 'Actuary' | This is the person who calculates the risk and the premuims for insurance policies. |
| Outline the role of the 'Loss Adjustor' | The Loss Adjuster to put a correct value on the damage done if the insurance company thinks that the claim may be false. |
| Explain the term 'compensation' | Money paid out by an insurance company as a result of a claim for damage or loss. The amound will depend on damage. |
| Name the document do you fill out when seeking insurance? | Proposal form. |
| Explain the term 'premium' | This is the money you pay to get insurance. This is the actual cost of the insurance. |
| Explain the term 'policy' | Written document from the insurance company containind details of the insurance. |
| Explain the term 'Loading' | Increase in your premium because you are a higher risk, e.g.no car alarm |
| Explain the term 'discount' | Decrease in your premium because you are a lower risk, e.g. Safe driving history |
| Explain the term 'no claims bonus' | A discount off your premium as a result of making no claims. |
| Oultine 2 types of 'motor insurance' | 1. 3rd Party Fire and Theft = Covers 3rd party in an accident as well as fire or theft 2. Comprehensive = covers all parties |
| Name the 5 principles of insurance | 1. Utmost good faith 2. Insurable Interest 3. Indemnity 4. Contribution 5. Subrogation |
| Explain the term 'utmost good faith' | You must always tell the truth on proposal form when applying for Insurance. |
| Explain the term 'insurable interest' | To insure something you must ‘gain by its existence and suffer by its loss’. E,g, you cannot insure somebody else’s car |
| Explain the term 'indemnity' | You cannot make a profit from insurance. E.g. if a car is worth €22,000 then you cannot insure it for €25,000. |
| Explain the term 'contribution' | If you insure something with more than one company, then compensation will be shared by the companies. |
| Explain the term 'subrogation' | In the event of a full claim hte insurance company 1. owns the wreck 2. can sue a 3rd party |
| Explain the term 'average clause' | This applies when an item has been underinsured. Compensation will be paid relative to the amount the item is insured for. |
| What is the formula for calculating premiums? | value/per '000 x Cost |
| What is the formula for calculating the average clause? | Amount insured/True value x Damage done |
Created by:
dqualter
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