Insurance Fundamentals

Accident and Sickness Insurance

• Definition: Accident and Sickness (A&S) insurance provides financial protection against unexpected medical expenses or loss of income due to injury or illness.
• Types of A&S Insurance:
  • Disability insurance: replaces income if unable to work due to illness or injury.
  • Critical illness insurance: pays a lump sum upon diagnosis of a specified illness (e.g. cancer, heart attack).
  • Hospital cash insurance: provides a daily or weekly benefit for hospital stays.
• Key features:
  • Premiums: usually paid monthly or annually.
  • Waiting period: time before coverage begins.
  • Benefit period: duration of benefit payments.
  • Elimination period: time before benefit payments start.

Ethics and Professional Practice

• Code of Ethics: a set of principles guiding the conduct of insurance professionals.
• Key principles:
  • Integrity: act with honesty and transparency.
  • Competence: maintain knowledge and skills to provide quality service.
  • Confidentiality: protect client information.
  • Objectivity: make decisions based on facts, not personal interests.
  • Fairness: treat clients fairly and without bias.
• Professional obligations:
  • Disclosure: provide clients with relevant information about policies and services.
  • Duty of care: act with reasonable care and skill when advising clients.
  • Compliance: adhere to regulatory requirements and industry standards.

Insurance Contracts and Policy Provisions

• Insurance contract: a legally binding agreement between the insurer and policyholder.
• Key elements:
  • Insuring agreement: outlines the coverage provided.
  • Exclusions: lists what is not covered.
  • Conditions: policy terms and requirements.
  • Endorsements: changes or additions to the policy.
• Policy provisions:
  • Premium payment provisions: specify how and when premiums are paid.
  • Grace period: allows policyholders to pay premiums after the due date.
  • Cancellation provisions: outline the process for canceling the policy.
  • Renewal provisions: specify how and when the policy can be renewed.

Test your knowledge of insurance basics, including accident and sickness insurance, ethics and professional practice, and insurance contracts and policy provisions.