40 Questions
What is the principle that requires the insured to disclose all relevant facts to the insurance company?
Utmost Good Faith
Which type of insurance is not a contract of indemnity?
Life insurance
What happens to the right of ownership of the property after compensation has been paid?
It shifts from the insured to the insurer
What is the term for the pecuniary interest of the insurer in the subject matter of the insurance?
Insurable Interest
Which principle applies when there is more than one insurer?
Contribution
What principle ensures that the insured is compensated only for the incidents mentioned in the policy?
Proximate Cause
What happens if the insured hides a fact that would increase their premium amount?
The insurer will void the insurance policy
What is the purpose of the principle of indemnity?
To compensate the insured against possible damage or loss
When was life insurance introduced in the Philippines?
1898
What is the name of the first domestic non-life insurance company in the Philippines?
Yek Tong Lin Fire and Marine Insurance Company
What is the Law of Large Numbers also referred to as?
Law of Average
What is the main purpose of insurance?
To reduce risk by combining a sufficient number of exposure units
What is a policy in the context of insurance?
A contract between an insurer and an insured
When was the first domestic life insurance company established in the Philippines?
1910
What is the primary function of the Law of Large Numbers in insurance?
To calculate the probable loss experience
What is the main benefit of insurance?
To receive financial protection and reimbursement of damages
What determines the cause of loss in insurance?
The peril that is most effective in causing the damage
What is the main difference between public and private insurance?
The funding mechanism
What is the primary purpose of life insurance?
To provide financial support for your family in the event of your death
What is the function of a deductible amount in health insurance?
It is the amount the insured must pay before the insurer begins to pay
What type of insurance provides coverage for damages or losses due to fire, theft, and other named perils?
Homeowner's insurance
What is the purpose of a disability insurance policy?
To provide a percentage of an employee's wages if they become unable to work
What is unique about whole-life insurance compared to term insurance?
It provides savings as well as insurance
Which type of insurance is perhaps the most commonly held type of insurance?
Automobile insurance
What is the benefit of purchasing coverage through a provider on a wholesale basis for its members?
It costs each individual worker/member less than if they had to purchase an individual policy
What does a 'certificate of credible coverage' provide to an individual?
Necessary document to provide to a subsequent insurance company in the event of terminating coverage
What type of insurance does Panibio not include?
Life insurance
What is the primary characteristic of Variable Universal Life Insurance (VUL)?
It is a permanent life insurance and investment rolled into one product
What is covered under Marine Protection and Indemnity Insurance?
Both personal injury or death and loss or damage to the vessel or property of another person
What percentage of the VUL insurance premium goes to the cost of insurance in the Philippines?
5%
What is not included in Panibio?
Insurance against loss by reason of bodily injury to any person arising out of ownership, maintenance, or use of automobiles
What does the term 'variable' mean in Variable Universal Life Insurance (VUL)?
The investment returns vary depending on the rise and fall of the markets
What is the primary benefit of Variable Universal Life Insurance (VUL)?
It provides financial protection for when the policyholder either dies too soon or lives too long
What is the primary focus of Engineering Insurance?
Erection, testing and working of any machinery, plant or equipment
What type of insurance covers bridges, tunnels, and other instrumentalities of transportation and communication?
Panibio
What are the two types of private health insurance in the Philippines?
HMO and health insurance policies
What is the characteristic of a permanent life insurance policy like VUL?
It does not expire as long as premiums are paid
What is included in Panibio?
Both precious stones, jewels, jewelry, precious metals and bridges, tunnels and other instrumentalities of transportation and communication
What type of insurance is not a type of Panibio?
Life insurance
What does Engineering Insurance provide?
Complete protection against risks associated with erection, testing and working of any machinery, plant or equipment
Study Notes
History of Insurance in the Philippines
- Life insurance was introduced in the Philippines in 1898 by the Sun Life Assurance of Canada.
- The first domestic non-life insurance company, Yek Tong Lin Fire and Marine Insurance Company (now known as the Philippines First Insurance Company), was established on June 8, 1906.
- The first domestic life insurance company, the Insular Life Assurance Company, Ltd., was organized in 1910.
Law of Large Numbers
- The Law of Large Numbers is a mathematical law that states that the accuracy of predictions about future outcomes increases when the number of similar, independent exposure units is increased.
- This law is the theoretical basis of the business of insurance, as it allows insurers to predict collective losses and make predictions about future outcomes.
Principles of Insurance
- Insurance is a social device that combines the risks of individuals into a group, using funds contributed by members to pay for losses.
- Utmost Good Faith: an insurance contract must be made based on utmost good faith, with the insured disclosing all relevant facts to the insurance company.
- Insurable Interest: the insurer must have a pecuniary interest in the subject matter of the insurance.
- Indemnity: insurance contracts, such as fire and marine insurance, are contracts of indemnity, where the insurer undertakes to compensate the insured against possible damage or loss.
- Subrogation: the right of ownership of the property shifts from the insured to the insurer after compensation has been paid.
- Contribution: if there is more than one insurer, the insurer can ask the other insurers to contribute their share of the compensation.
- Proximate Cause: the property is insured only against the incidents mentioned in the policy.
Types of Insurance
- Public and Private Insurance: public insurance includes Social Security, Medicare, and temporary disability insurance, while private insurance plans are offered by private corporations or organizations.
- Life Insurance: provides for the beneficiaries of the policyholder in the event of death, with two types: term insurance and whole-life insurance.
- Health Insurance: covers the cost of hospitalization, doctor visits, and prescription medicines, with a deductible amount.
- Disability Insurance: pays a certain percentage of an employee's wages or a fixed sum if the employee becomes unable to work due to illness or accident.
- Homeowner's Insurance: provides insurance for damages or losses due to fire, theft, and other named perils.
- Automobile Insurance: provides insurance for damages or losses due to accidents, with a group policy option for employees.
- Variable Unit-Linked Insurance (VUL): a permanent life insurance and investment rolled into one product, providing living, death, and disability benefits plus an investment component.
- Health Maintenance Organizations (HMO) and health insurance policies: two types of private health insurance in the Philippines.
Marine Insurance
- Marine insurance covers risks associated with the construction, repair, operation, or use of vessels, craft, or instrumentalities in use of ocean or inland waterways.
- Includes liability for loss of or damage to the property of another person.
Engineering Insurance
- A comprehensive insurance that provides complete protection against risks associated with the erection, testing, and working of any machinery, plant, or equipment.
Learn about the introduction of life insurance in the Philippines, the establishment of the first domestic non-life insurance company, and the organization of the first domestic life insurance company.
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