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26 Cards in this Set

  • Front
  • Back
What is subrogation
Gives insurer the right to pursue others for a claim you make.
Four definitions of insurance - aleatory, adhesion, waiver provisions, Unilateral
Unilateral - only one party bound by commitment
Adhesion - a 'take it or leave it' contract.
Waiver provisions: Only the president, VP, secretary may alter contract.
Aleatory: Outcome affected by chance where payoff is unequal and large
Parts of the Insurance Contract
DDICE
Declarations - factual statements that ID the specific people & property insured
Definitions - explanation of key policy terms.
Insuring Agreement - basic promise of Ins Co.
Conditions - detailed description of duties & rights of both parties.
Exclusions
Defenses against Unintentional Torts (infringement of rights)
1) Assumption of risk - skiing
2) Contributory - jaywalking
3) Comparative (apportions blame)
4) Last clear chance
Sections on a Home Owners Insurance Policy
Abode (Dwelling & attached structures)
Buildings
Contents - personal property
'Ditional (indemnity - i.e. loss of use)
Enemies (liability)
First Aid (Medical payments to others)
Basic Perils Covered
Wind
Hail
Aircraft
Riot
Vandalism
Explosion
Smoke
Fire
Lightning
Theft
Broad Form Incl Basic + RAF
Rupture of a system
Artificially generated electricity
Falling object
Exclusion
Earthquake
Flood
Intentional Loss
Neglect
Ordinance
Earth movment, War, Power failure, nuclear hazard
Dividend Options
Cash:
Reduction of premiums:
Accumulation with interest: (taxable interest)
Paid up Additions:
1 year term (aka 5th dividend option - div used to buy 1yr term = to CV)
Non-forfeiture Options
- Cash Option
- Usage
- Reduced amount of paid-up
- Paid up term (aka 'extended term') policy stays in force as term for as long as CV pays term premium
Home Owners Insurance

(Coverages)
Abode (dwelling & attached structures
Buildings (detached buildings)
Contents - Boats & trailers ltd to $1K. Excl property of renters.
'Dittional (Loss of use)
Enemies (personal liability)
First aid (medical payments to others)
Basic Perils Covered
Wind
Hail
Aircraft
Riot
Vandalism
Explosion
Smoke
Fire
Lightening
Theft
Broad Form Coverage
WHARVES / FLT
+
Rupture of a system
Artificially generated electricity
Falling objects / Freezing of plumbing
8 General Exclusions
1) Ordinance of law
2) Earthquake
3) Water damage (flood)
4) Power failure
5) Neglect
6) War
7) Nuclear hazard
8) Intentional loss
also sinkhole is a covered peril
Policy Types and Coverage
HO-1 - Basic
HO-2 - Broad
HO-3 - Open (B = 10%, C = 50%, D = 30%)
HO-5 (3/15) - Open
HO-8 - Older home - Basic
HO-4 - (renter's) - C = broad, D = 30% of C
HO-6 - Condo owner - C - Open, D - Broad + $5K of loss assessment
Medicare Part A: Hospital Insurance
Eligibility: >65 & entitled to SocSec or disabled & receiving benefits >2yrs.
Benefits: A) Hospital stays for 60 days (1st deductible), add'l 30 days (2nd deductible), add'l 60 days (3rd deductible). Inpatient hospital care ltd to 150 days. B) SNF for ≤100days. C) Unltd post-hospital home health services D) Hospice E) 3 pints of blood
Medicare Part B: Medical Insurance - What's Included?
Voluntary program - premiums payable. Medicare pays 80% of approved charges (with no out of pocket limit).
Benefits: A) Doctors services (house calls, office visits & in hospital) B) Diagnostic tests, radiology/pathology, OT, drugs that CANNOT be self-administered. C) Outpatient services D) Unltd home health services E) Preventative care (colorectal & mammograms) & annual physical
Medicare Part B: Medical Insurance - What's Excluded?
1) Routine dental care and dentures
2) Optometry needs
3) Most immunizations (although 1 free flu and pnemonia shot)
4) Prescription drugs`
Medicare Part D: Prescription Drugs?
Need to be part of a private insurance program. Must have Part A/B. Entitles patient to 50% drug discount
Medicare Supplement Policies
Ten medicare supplement policies available (A - J).
Generally incl deductibles & co-insurance. Further down the list incl add'l benefits. Retirees may only be sold 1 medigap policy at a time.
Health Savings Accounts (HSA's)
Deductible for AGI on front of 1040. Contributions by individual or employer. Tax deductible up to $3050-S/$6150-MFJ. Must be covered under a High-deductible health plan. Deductible from plan (min) $1200 single/$2400 family.
Medical Savings Account (MSA)
Either individual OR employer may contribute but NOT both. Suitable for self-employed or small employers (<50). Must have High-deductible Health Plan. Deductible range = $2-$3K for single & $4.1-$6.15K for family.
Conditions Applicable to both HSA's and MSA's
Distributions can be for health-care needs not covered by HDHP & are tax free. No OTC drugs. Funds can be used to pay for retiree health insurance, prescription drugs, COBRA & LTC. Can be carried forward. Can do one-time IRA to HSA/MSA rollover. Can be used for dental, optical,
Accelerated Benefits Rider (ABR) on a Life Insurance Policy
Pays a portion of the DB if insured deemed to be terminally ill (<2yrs) or chronically ill (unable to perform ≥ 2 ADL's & will qualify for LTC expenses only). May typically make available 50% of DB payable tax-free now & the other 50% at death.
Viatical Settlements
Sale by a terminally ill (2yrs to live) insured to a company specializing in these transactions. Amounts received tax free to insured. Viatication company receives full DB, taxable only on amount received above basis (basis incl's premiums paid + initial purchase amount).
Life Settlements
Sale by non-terminally ill person. Proceeds received are taxable as follows;
a) Up to basis (tax-free)
b) Ordinary income on difference between basis & cash-value (represents growth in cash-value)
c) LTCG above ≥ CV or basis to proceeds received.