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45 Cards in this Set
- Front
- Back
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services that are not considered to be medically required and are not covered by a provincial health care plan? |
medical examinations required for employment, life insurance, schools, camps, passports, visa or similar purposescosmetic surgery for purely aesthetic purposesadvice by telephonehospital charges for private or semi-private accommodation |
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How does out-of-province health care work? |
You are covered by the health care plan of your province of residence and pay no fees except for treatment that is over and above the expenses covered by your provincial health care plan and transportation |
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What is included/excluded with extended health plan travel benefits? |
-includes 15 days of emergency medical coverage while travelling outside the province of residence -in event of an accident or unexpected illness -Medical conditions treated or sought advice w/i 90 days before travel, not covered |
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What is included/excluded with provincial health plan travel benefits outside country? |
-Individual must pay for the cost of emergency health care and provide itemized account & receipts to apply for reimbursement for out of country claims. -Payment for physician services will be reimbursed in Canadian funds paid at the same rate that would have been paid if the services were received in province -Certain expenses excluded (ie. no ambulance, helicopter, chiropractor, drugs, etc.) -expenses are eligible if a medical need arose unexpectedly, or prior authorization was obtained in writing |
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What is the order of importance of disability, life and critical illness insurance? |
1. Disability/Life 2. Critical Illness If cannot afford CI, could lengthen waiting period of DI |
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Why should one have extra insurance while travelling in a province other than province of residence? |
-does not subsidize fees charged for ambulance service obtained outside province of residence -advised to obtain coverage for emergency transportation while you are away and, if necessary, the cost of transportation back to province -to cover the cost of services not included in the reciprocal agreement between provinces Note: except QB, most provinces bill other province for fees, rather than req'ing payment |
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To qualify for an extended health benefit plan, what are the provincial health plan requirements? |
To qualify for an extended health benefit plan, the applicant must be a member of a provincial health plan AND a resident of the province in which they are applying. Extended plans only allowed to cover excess and amts not covered by prov plan |
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What are three forms of Emergency travel health insurance? |
government health care insurance extended health care insurance travel health care insurance |
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What services/supplies/treatment is normally covered by extended health care travel insurance? |
If emergency w written order from physician: Prescription drugs, limited to a 30 day supply X-rays and laboratory services Local licensed ambulance services Wheelchair rental, crutches, braces Private duty RN or attendant, other than a relative (to max) Prescribed services of a chiropractor, chiropodist, podiatrist, osteopath or physiotherapist, up to but not to exceed a total of $200 per practitioner. |
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What benefits are normally covered by extended health care travel insurance? |
Hospital Medical services (can include full cost of semi-private room), Extended health care, Emergency air ambulance, Emergency return home, Return to your original trip destination Transportation of a relative, Repatriation, Vehicle return, Dental accident, Relief of dental pain,Meals and accommodation, Out-of-pocket expenses, Automatic extension of coverages (May include cost of having family member come get you) |
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What benefits are NOT normally covered by extended health care travel insurance? |
Elective medical procedures Diagnostic procedures (unless emergency) |
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When is a private health insurance plan not eligible for the Federal Medical Expenses Tax Credit? |
When premiums paid by an employer to a private health insurance plan on behalf of an employee are not treated as taxable income or a taxable benefit |
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What is a condition of self-employed individuals deducting some or all of the amounts paid for their PHSP? |
- engaged as a sole proprietor or a partner in an active business (can incl inc owner/mgr) -self-employment must be their primary source of income in the current year, or their income from other sources cannot exceed $10,000 -equivalent coverage is extended to all permanent, full-time, arm's-length employees -purchased from a third party -limited to $1,500 for each of the business owner, his or her spouse and adult children, plus $750 for each minor child covered by the PHSP |
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What are the limits on claims of eligible medical expenses paid for other dependents? (ie adult children, parent, niece, sibling) |
-resident of Canada at any time in the year -total expenses have to be more than 3% of dependent's income or the METC threshold, whichever is less, (course incorrectly shows 3% of own income) -maximum of $10,000 (was removed after this course written) |
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What are some features of LTC insurance? |
-insured must be between ages of 40 and 80 at the time the policy is issued -No physical exam, questions and telephone int -Pays when cognitive impairment or cannot perform 2 of ADL - |
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How do the premiums of a private health service plan compare tax wise to that of ltc or dis insurance? |
PHSP premiums eligible for fed med tax credit or as deduction from self-employment income to limits. Benefits are tax free. Ind paid CI, LTC and Dis are not a tax deduction or eligible for credit, but benefits tax free. |
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Why should all clients in their 50s and 60s consider long-term care for themselves and their parents? |
-parental support is a legal obligation arising under provincial family law, with legislation varies from province to province -one in four Canadians said they provided care at home to someone with a long-term physical or mental illness, or someone who was frail or disabled |
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Why would total cost of any anesthesia used in an emergency not be covered any private health insurance? |
Private health care insurance can only provide coverage for services above those provided by their provincial plan. Since all provincial plans cover the cost of emergency anesthesia, up to provincial limits, a comprehensive private health insurance plan can only cover any anesthesia costs over and above the provincial limit, |
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In respect to government health care, what are the five principles ofthe Canada Health Act? |
Public administration Comprehensiveness Portability Accessibility Universality |
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3. What is Life expectancy? |
remaining years expected to live is the average duration of life remaining for a person of a given age and sex |
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What is Rate of mortality? |
probability of death in a year is the ratio of the number of deaths in a given group in a year's time to the total number of individuals in the group |
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What factors affect the rate of mortality? |
age and gender country and area of residence occupation and socio-economic class (which includes level of education, standards of health, and availability of medical services) |
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What are trends with life expectancy & mortality rates? |
-rate of mortality increases with age -trend of the mortality rate is downward for all age groups -The total number of deaths per year is increasing as the Canadian population ages |
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How do you evaluate the risks of death? |
CRITICAL: an occurrence would have very serious financial consequences, possibly leading to bankruptcy. MATERIAL: an occurrence would have serious financial consequences, certainly resulting in a reduction in standard of living. MINOR: an occurrence would have little financial consequence, other than some minor loss of income or manageable expenses. INSURED: the risk has been transferred to an insurance company and insurance premiums are being paid. |
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What are two types of risk management strategies? |
risk control strategies that can reduce the probability are risk avoidance and risk reduction. risk financing strategies that can reduce the consequences are risk sharing and risk retention |
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How do you determine the amount of life insurance required to provide income? |
the amount of after-tax income required by each member other sources of income including CPP survivor's benefits average or marginal income tax rates the duration over which the income will be required an assumed inflation rate a pre-tax investment return |
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How do you determine the amount of life insurance required to provide capital? |
final expenses including burial expenses and probate fees debts including a mortgage on the family residence the costs of post-secondary education income taxes upon death |
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How do you determine the amount of life insurance required to pay income taxes? |
1. estimating the taxable capital gains and the projected value of registered assets in the year of death and multiplying by the appropriate marginal tax rate OR 2. calculating the present value of the income taxes and the present value of the life insurance premiums |
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How do you determine the amount of life insurance required for key person insurance? |
the salary of a replacement overhead costs associated with that position (such as employee benefits and the employer's share of CPP benefits) training costs a projection of the business income that will be lost until the replacement is able to fulfil the duties of the deceased |
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On what three factors do Insurance companies base the gross premiums for their life insurance products? |
mortality cost, which is the probability of death in a year times the amount at risk to the life insurance company, which is the death benefit for a term life insurance policy operating margins, which are amounts to cover commissions, underwriting costs and all other costs, and provide a profit in the case of a stock life company investment income from invested funds resulting from the premiums. |
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What are some important differences between group and individual life insurance? |
-costs are usually pooled, so that the premiums are the same regardless of gender, health, or smoking habits. -lower premium bc no mktg -no guarantee of renewability or amount of premiums -master policy governing the plan may be cancelled by the insurance company without any provision for continuing coverage after termination -master policy may be revised through discussions between group representatives and the insurer -must maintain membership in the association or continue with the employer in order to maintain coverage |
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What is policy reserve? |
aka accumulating fund, is a pooling of the excess premiums paid by all policyholders. In later years, the annual mortality cost of policyholders will exceed the premiums and the shortfall will be withdrawn from the policy reserve. The policy reserve is often incorrectly considered to be the insurance company's profits. |
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What is the formula for accumulating fund |
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Why is the premium for par policies higher than for non-par? |
premiums for par are set based upon more conservative estimates than for non-participating policies. Actuaries tend to underestimate future earnings and overestimate costs to give the insurer a margin of safety |
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How is a dividend on a life insurance policy is calculated? |
as the excess of the actual return on the policy reserve over the guaranteed rate 1. paid out less in death benefits and operating costs than anticipated or 2. investment returns higher than predicted. |
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What are dividend options from life insurance? |
paid out to the policyowner annually in cash used to reduce the premium otherwise payable accumulated with interest as part of the policy used to purchase additional paid-up amounts of insurance |
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How does a policy dividend from an insurance company differ from a dividend that is paid by a commercial corporation? |
Policy dividend is a partial refund of premiums paid by the policyowner. (tax free) A corp dividend represents an actual share of the company's profits.(taxable) Note: Stock life insurance companies have shareholders in addition to their policyowners. As such, stock companies may pay two types of dividend: a policy dividend to their policyowners and a shareholder's dividend to their shareholders. |
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How do you calculate the premium for a participating policy? |
(annual fee + ((death benefit ÷ value of one unit) × annual premium per unit)) |
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What are considerations when deciding between term-100 and whole life? |
Term-100 is appropriate if the need is simply for permanent insurance and there is no intention to ever cancel the policy or to want to skip or reduce premium payments Whole life is appropriate if insured wants to retain the option of recovering the CSV |
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What provisions apply only to whole life insurance? What is waiver of premium? |
Only whole life: non-forfeiture of benefits paid-up policy guaranteed-issue Waiver of premium refers to disability and applies to term and w/l |
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How do you determine if a risk is considered critical or material? |
Material if a reduction in standard of living, critical if bankruptcy. ie. if near retirement, no mortgage or dependants and full CPP benefits, if only a small ret savings, what is risk of one spouse dying? Material...bc with CPP income, the surviving spouse would not go bankrupt, though would have a reduction in standard of living |
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What would a comprehensive private health insurance plan cover re caring for or getting someone home who was injured while out of the country for 3 mo's? |
cost of returning home, transporting a relative to you to help, orhiring an attendant on the advice of a physician NOT: anesthesia - or any other service covered by provincial plan. As long as |
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Types of Policies: Endowment policies Limited payment life Quick pay Vanishing Guaranteed Issue |
Endowment policies: policy pays out once premium-paying period complete, insured alive Limited: payment period specific # yrs Quick pay: large payments Vanishing: dividends eventually pay premiums Guaranteed Issue: no medical 50-70 small ben |
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Automatic premium loan Premium Holiday Nonforfeiture Paid up |
Premium Holiday: skip premium if csv suffient Automatic premium loan: pay premium in default from CSV as loan Nonforfeiture: benefits allow relinquish policy for CSV, use CSV to purhcase estended term life, borrow from CSV as collateral Paid up: not mature, but req's no premiums |
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