Accident &sickness Insurance

Front 1

The insurance Companies Act uses what 5 criteria to define Accident and Sickness Insurance (A&S)

Back 1

1) benefits for loss due to accidental bodily injury to the life insured

2) benefits for loss due to accidental death of the life insured

3) benefits for loss resulting from the sickness or disability of the life insured

4) benefits for loss due to the death of the life insured

5) benefits for Healthcare, including dental and preventative care of the life insured

Front 2

Simply stated what does A&S insurance do?

Back 2

A&S relieves insured individuals of the burdens of medical expenses or income loss arising from illness, injury or necessary medical treatment not covered by provincial health insurance plans.

Front 3

What do all retirements have in common?

Back 3

They require income in our example degree or another

Front 4

Name 7 common types of retirement income

Back 4

1) government pension plans & old age security

2) employment pension plans

3) private pension plans (rrsp)

4) non-registered investments

5) inheritances

6) part-time or self employment

7) liquidation of assets

Front 5

Give 6 examples of family needs beyond wealth accumulation individuals may plan for?

Back 5

1) tuition

2) orthodontics

3) family vacations

4) special needs children

5) dependant parents

6) boomerang children

Front 6

Give 6 examples of risks that could disrupt financial plans?

Back 6

1) unexpected expenses

2) loss of income or savings

3) lower standard of living

4) inflation

5) longevity

6) debt

Front 7

Give an example of an unexpected expense

Back 7

A stroke, causing loss of job and modification of ones home, as well as an inability to care for children

Front 8

What is the only way to accumulate savings or a long term asset base? What is this dependent on?

Back 8

1) By generating more income annually then you need to live on.

2) availability of work and the individuals ability to continue working.

Front 9

Why is inflation a concern to long term financial planning?

Back 9

It decreases buying power

Front 10

According to the 2012 Canadian Survey on Disability what percentage and how many Canadians reported being limited in their daily activities because of disability?

Back 10

13.7% or 3.8 Million

Front 11

What percentage of working age Canadians (15 to 64) reported having a disability in 2012? And Seniors? (65+)

Back 11

10% and 33%

Front 12

Who is at higher risk of having a disability men or women?

Back 12

Women at 14.9% vs 12.5% for men

Front 13

What is monthly cost for most long term care facilities?

Back 13

$3000- $5000

Front 14

The needs met by A&S insurance for individuals include protection for?

Back 14

1) income

2) savings

3) assets

Front 15

What is income protection?

Back 15

Income protection replaces a percentage of a person's regular income from employment or self-employment if the insured is ill or injured and unable to work.

Front 16

How does income protection work?

Back 16

After a suitable waiting period following the onset of disability, during which no benefits are payable, the insured will receive a monthly income payment from the insurer. The benefits will be payable for a prescribed benefit period or until the disabled insured is able to return to work, which ever comes first.

Front 17

Give an example of income protection.

Back 17

Worker hurt on job, paid after 90 days from policy

Front 18

How does A&S protect savings in the event of injury or sickness to the policy holder?

Back 18

It defrays the financial impact of many of the risks to savings by providing cash to replace lost income and pay medical bills.

Front 19

Name 3 goals of business owners.

Back 19

1) business profitability (income protection)

2) business succession (capital protection)

3) sale at Fair market value (protection of estate value)

Front 20

Define Risk

Back 20

The chance that given a result (usually negative) might occur.

Front 21

Name a define the two types of risk

Back 21

1) systematic- common to the business environment itself

2) unsystematic- unique to the clients business itself

Front 22

What are the two options for dealing with cost associated with risk that a business might suffer as a result of costs associated with injury or illness to an owner or essential employee?

Back 22

1) self funding

2) insurance

Front 23

What are the three options to a business owner who wishes to self-fund the cost of risk associated with loss?

Back 23

1) pay the cost out of current cash flow

2) borrow to acquire funds to pay the cost

3) erode savings or sell assets

Front 24

What are the two factors for success smaller and private business rely on?

Back 24

1) ongoing revenue generated by the efforts of the owners

2) key employees of the business and hiring and keeping quality employees.

Front 25

What is disability insurance? What are the benefits?

Back 25

Disability Insurance provides financial protection to working individuals who become injures or I'll and unable to work. Benefits paid to or on behalf of qualifying insured individuals range from income replacement to paying monthly mortgage, loan, and credit card payments on behalf of the disabled claimant

Front 26

Name 5 sources of disability insurance.

Back 26

1) personally owned policies, acquired from an insurance company

2) Group insurance coverage, gained by being a member of a union or association

3) creditor insurance, including mortgage insurance, offered to borrowers or credit card holders dealing with major financial institutions

4) provincial workers compensation boards

5) disability pensions offered the CPP

Front 27

Who are Disability insurance contracts between?

Back 27

Directly between the applicant, who is both the insured and life insured under the contract, and the insurance company

Front 28

What is group disability insurance? And who is usually the policy holder and who is the life insured

Back 28

A disability policy provided to many individuals (plan members) under the umbrella of one (group) policy

The employeer is the policy holder

The employee is the life insured

Front 29

What is creditor disability insurance?

Back 29

An insurance offered by commercial lenders to their clients designed to pay minimum loan payments should the borrower become disabled and unable to work. It's provided through a third party. Typically have a 90 day waiting period and stringent definitionso of disabled

Front 30

Name the differences between a individual Mortgage disability payment and a lenders mortgage disability payment.

Back 30

Front 31

Name the 5 most common types of individual disability insurances

Back 31

1) non-cancelable policies

2) guaranteed renewable polices

3) cancelable polices

4) guaranteed issue policies

5) non-traditional disability insurance plans

Front 32

What are the 8 main features of a non-cancelable policy?

Back 32

1) highest level of guarantee

2) the right afforded to the holder are virtually incontestable for the life of the contract (usually to 65)

3) the policy cannot be cancelled unilaterally by the insurance company

4) the policy premiums cannot be increased

5) policy benefits cannot be reduced or modified

6) the insurer is compelled to renew annually till 65

7) only the holder has the right to modify the policy

8) when the policy holder turns 65 they have the option to convert the policy without medical evidence, to a guaranteed renewable contract, with a shortened benefit period, with premiums based on the policy holders age

Front 33

List the 6 features of a guaranteed renewable policy

Back 33

1) bind the insurer to renewing coverage each year until the maturity date

2) the insurer has the right to modify premiums unilaterally

3) the policy of an individual insured cannot be changed, any alterations must apply to the entire class of policies, impacting all lives insured under the contract type

4) any changes to the contract must be communicated, at least 30 days before the change or canellatoltion takes place

5) changes are initiated at annual renewal, if at all

6) usually have an "any occupation" definition of disability and are available to the higher risk occupations

Front 34

List the 6 features of a cancelable policy

Back 34

1) offer the fewest guarantees for the policy holder

2) can be modified

3) the benefits can be reduced at any time, without consent

4) the premiums can be increased at any time without consent

5) the policy can be cancelled at any time with 30 days notice, as long as it applies to the entire class, not just one individual,

5) lower premiums

6) usually issued to high risk occupational classes

Front 35

List the 4 features of a guaranteed issue policy

Back 35

1) individually issued policies

2) an alternative to traditional long term disability group coverage

3) are available to groups in low risk occupational classes like executives and professionals

4) guaranteed the member of the target group will be offered coverage

Front 36

Name 4 possible restrictions for guaranteed issue policies.

Back 36

1) size of the group

2) occupational class of the group members

3) minimum annual premium commitment

4) minimum aggregate age for the group members

Front 37

T or F guaranteed issue policies carry higher premiums than traditional group coverage?

Back 37

True

Front 38

How can an insurer choose to terminate the guaranteed aspect of a guaranteed issue plan?

Back 38

By refusing to accept any further lives insured on a guaranteed basis