Insurance Basics

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Questions and Answers

What happens to an annuity when you're ready to start receiving retirement income?

It is converted into a lump sum payout

It remains in the investment account

It adjusts based on market performance

It is turned into a steady stream of income payments (correct)

What is the main benefit of having a medical and health insurance policy?

It allows for free annual check-ups

It provides discounts on medication

It offers lower premiums with higher deductibles

It ensures that you don't have to worry about the cost of seeking treatment during emergencies (correct)

What is a common feature of medical and health insurance policies?

No exclusions apply

Coverage for all types of treatments

Unlimited coverage ceiling

Certain exclusions, just like other insurance policies (correct)

What type of damages is covered by a motor insurance policy?

Third party bodily injury and death, third party property loss or damage Signup and view all the answers

What is covered under hospitalization and medical expenses in travel insurance?

Hospitalization, hospital or surgical expenses, outpatient medical expenses, and daily allowances up to a maximum number of days Signup and view all the answers

What is the purpose of repatriation in travel insurance?

To return the remains of the insured to their home country Signup and view all the answers

What is the condition for reimbursement of a lost passport?

Loss must be reported to the police within 24 hours Signup and view all the answers

What type of loss is covered under accidental loss or damage to baggage in travel insurance?

Accidental loss or damage to your baggage, clothing, personal effects, and even money Signup and view all the answers

What is the main benefit of having a whole life insurance policy?

It provides life-long protection with a savings plan Signup and view all the answers

What is the primary purpose of paying premium payments in life insurance?

To receive a lump sum known as a death benefit after death Signup and view all the answers

What is the primary purpose of an insurance company?

To assume financial responsibility for losses from an insured risk Signup and view all the answers

What is the term for the periodic payment made by a policyholder to an insurance company?

Premium Signup and view all the answers

What is the primary purpose of an insurance pool?

To help those who suffer a hardship from an insured risk Signup and view all the answers

What does general insurance cover?

Non-life insurance products Signup and view all the answers

What is the primary benefit of purchasing an insurance policy?

Protection against possible financial loss and peace of mind Signup and view all the answers

What is the main difference between term insurance and endowment insurance?

Term insurance is for a limited period, while endowment insurance is for life Signup and view all the answers

Study Notes

Insurance Basics

The primary purpose of an insurance company is to assume financial responsibility for losses from an insured risk.
Insurance is based on the concept of a large group of people paying premiums into a fund to help those who suffer a hardship.

Insurance Terms

The financial interest that a person has in the subject matter of an insurance policy is called insurable interest.
Premium is the periodic payment made by a policyholder to an insurance company.
The primary benefit of purchasing an insurance policy is protection against possible financial loss and peace of mind.

Insurance Types

The primary purpose of life insurance is to provide a lump sum known as a death benefit after death.
The main difference between general insurance and life insurance is that general insurance is a non-life insurance product, while life insurance covers life.
Whole life insurance provides life-long protection with a savings plan.

Annuities and Endowments

The primary purpose of an annuity contract is to protect and grow your money and provide a stream of income during retirement.
When you're ready to start receiving retirement income, an annuity is turned into a steady stream of income payments.
The main difference between term insurance and endowment insurance is that term insurance is for a limited period, while endowment insurance is for life.

Medical and Health Insurance

The main benefit of having a medical and health insurance policy is that it ensures you don't have to worry about the cost of seeking treatment during emergencies.
Certain exclusions are a common feature of medical and health insurance policies.
The primary difference between an annuity and a medical and health insurance policy is that an annuity provides a stream of income during retirement, while a medical and health insurance policy provides coverage for medical expenses.

Motor Insurance

A motor insurance policy covers third-party bodily injury and death, third-party property loss or damage.

Travel Insurance

Hospitalization and medical expenses covered under travel insurance include hospitalization, hospital or surgical expenses, outpatient medical expenses, and daily allowances up to a maximum number of days.
The purpose of repatriation in travel insurance is to return the remains of the insured to their home country.
Accidental loss or damage to baggage, clothing, personal effects, and even money is covered under accidental loss or damage to your baggage.
The primary reason for reimbursement of expenses incurred due to loss of travel or accommodation is to cover unexpected travel-related expenses.

Takaful Insurance

The principle of Takaful is based on cooperation among policyholders for their common good.
The role of policyholders in Takaful is to cooperate among themselves for their common good.