FOI - Chapter 11

Podcast Beta

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which group of individuals is least likely to benefit from purchasing individual accident and sickness insurance?

Individuals seeking better coverage terms

Self-employed persons

Employees with access to a robust group plan (correct)

High-income employees

What is the impact of a longer elimination period on the insurance policy's premium?

The premium may decrease. (correct)

The premium increases.

The premium remains unchanged.

The premium becomes variable.

In which situation would 'Any Occupation' disability coverage provide no benefits?

If the individual remains unemployed.

If the individual can work in another occupation. (correct)

If the individual cannot perform their own occupation.

If the individual is still able to perform their regular duties.

What defines the 'Benefit Period' in an accident and sickness insurance contract?

The duration benefits are payable. Signup and view all the answers

Which of the following accurately describes 'Own Occupation' coverage?

Benefits continue even if the insured works in a different field. Signup and view all the answers

What will happen to an insurance contract if the applicant has no insurable interest when the contract is in effect?

The contract is void. Signup and view all the answers

Which of the following is NOT considered an insurable interest under the stated conditions?

A neighbor Signup and view all the answers

What does Long Term Disability coverage typically start after?

The end of the Weekly Indemnity Benefit period Signup and view all the answers

After how many years are statements on an insurance application typically incontestable, barring certain exceptions?

Two years Signup and view all the answers

Which expense is NOT covered under Major Medical coverage options?

Cosmetic surgery Signup and view all the answers

When might an insurer deduct unpaid premiums from a claim payment?

If the amount is still owed Signup and view all the answers

Which aspect is NOT typical for weekly indemnity coverage in disability income insurance?

Covers illnesses like the flu or colds immediately Signup and view all the answers

What is a potential consequence of losing one's health according to the information provided?

Loss of insurability Signup and view all the answers

What does Accidental Death and Dismemberment insurance equate to?

The same operation as under an individual policy Signup and view all the answers

Which limitation could affect accident and sickness insurance contracts?

Deductibles and maximum payout limits Signup and view all the answers

What is the primary reason insurers set a maximum amount of income insured?

To prevent individuals from having excessive insurance coverage that discourages returning to work Signup and view all the answers

Which of the following factors is NOT taken into account when determining premiums for individual accident and sickness insurance?

Family size Signup and view all the answers

Which type of individual insurance policy ensures the insured has coverage until age 65?

Non-cancellable policy with guaranteed renewal Signup and view all the answers

What impact does an applicant's age have on claims costs for insurance policies?

Older applicants have a higher risk of disability, increasing claims costs Signup and view all the answers

How is the definition of disability in a policy related to claim costs?

Policies that define disability as ‘own occupation’ are more likely to incur higher claim costs Signup and view all the answers

Which of the following does NOT contribute to the determination of insurance premiums?

Policyholder age with respect to retirement years Signup and view all the answers

What is included as part of the insurance contract?

Application form, policy, and any mutually agreed amendments Signup and view all the answers

Which factor is generally considered to lead to higher potential claim costs in accident and sickness policies?

Longer benefit periods Signup and view all the answers

What is the maximum duration for a single trip travel insurance policy?

180 days Signup and view all the answers

Which of the following factors does NOT affect travel insurance premiums?

Country of citizenship Signup and view all the answers

What defines a 'dependent child' under travel insurance policies?

Unmarried and under the age of 20 or up to 26 if in school Signup and view all the answers

Which of the following coverages is typically NOT included in a travel insurance policy?

Routine medical check-ups Signup and view all the answers

What type of illness or condition might not be covered by travel insurance due to previous existence?

Pre-existing conditions Signup and view all the answers

In terms of travel coverage territory, when is coverage usually activated?

When the insured is over 500 KMs from home Signup and view all the answers

What is generally excluded from travel insurance policies?

Illness related to substance abuse Signup and view all the answers

What kind of accident is defined as unforeseen and out of the insured’s control under travel insurance?

An external, violent occurrence Signup and view all the answers

What type of insurance protects insureds before their date of departure?

Trip cancellation insurance Signup and view all the answers

Under what condition might a pre-existing condition be covered in travel insurance?

If it is under control for a specified time prior to travel Signup and view all the answers

Study Notes

Individual Insurance

Self-employed individuals and employees without group insurance are prime candidates for individual accident and sickness insurance.
High-income earners may seek better coverage terms than available through group plans.

Disability Income Policy

Most common type of individual accident and sickness insurance.
Provides monthly income during a period of disability from sickness or accident.

Definition of Disability

Broader Definition ("Own Occupation"): Benefits continue if the insured cannot perform their specific job but can work in another occupation.
Limited Definition ("Any Occupation"): No benefits if the insured can work in any job suitable based on education, training, or experience.

Key Contract Features

Elimination Period: Time between the disability's onset and when benefits start; longer periods lead to lower premiums.
Benefit Period: Duration for which benefits are available, ranging from 1 year to until age 65.

Premium Determination Factors

Claims Costs: Influenced by policy type and potential claim costs based on benefits, elimination period, and definition of disability.
Operating Expenses: Costs associated with administering the insurance.
Investment Earnings: Insurers invest premiums, affecting the overall pricing.

Characteristics of Insurance Contracts

Application Inclusion: Contracts entail application forms, policy documents, and amendments.
Insurable Interest: Vital for contracts to be valid; applicants must have an insurable interest in the insured individual’s life.
Incontestability: Application statements become uncontestable after two years, except for fraudulent claims or age misstatements.
Unpaid Premiums: Insurers can deduct any overdue premiums from claims.

Group Insurance Overview

Employers purchase group insurance policies to cover all employees.
Weekly Indemnity: Short-term coverage, often covering the first few days of sickness or accidents for up to 52 weeks.
Long Term Disability: Starts after weekly indemnity coverage ends, lasting until age 65.

Major Medical Coverage

Reimbursement for expenses outside provincial coverage, such as dental care and prescription drugs.

Importance of Accident and Sickness Insurance

Protects against loss of health, future earnings, and the insurability of individuals.
Covers financial losses that can occur during prolonged illness or disability.

Travel Insurance Essentials

Provincial health plans may have varying agreements; hence the importance of travel insurance.
Policies can be single trip or annual, covering durations from a few days to 180 days.

Coverage Details

Coverage Territory: Generally applies when more than 500 km from home; may vary by policy.
Definitions: Accidents are unforeseen events; emergencies require urgent medical attention.

Pre-existing Conditions and Coverage

Illnesses prior to travel may not be covered unless under control for a specified time frame.
Coverage typically covers emergency medical services and may include trip cancellation protection.

Important Exclusions

Common exclusions involve pregnancy, acts of war, suicides, or engaging in hazardous activities.
Travel policies adhere to provincial statutory conditions.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz covers individual insurance options, focusing on disability income policies and their key features. Learn about definitions of disability and the implications of different terms used in insurance contracts. Test your understanding of individual coverage for self-employed individuals and high-income earners.