Fundamentals Chapter 11.pptx

Full Transcript

Gap Exercise Students have one minute write in the chat window the concept they thought of last week: a concept they find they do not clearly understand. What were you able to identify as a knowledge gap?? Believe it or not, this is a reviewing exercise! ACCIDENT & SICKNESS INSURANCE A...

Gap Exercise Students have one minute write in the chat window the concept they thought of last week: a concept they find they do not clearly understand. What were you able to identify as a knowledge gap?? Believe it or not, this is a reviewing exercise! ACCIDENT & SICKNESS INSURANCE AND TRAVEL INSURANCE THE CHANCE OF DISABILITY 1 in 3 people will suffer a disability lasting over 90 days before 65 years of age Average length is over 2 years DEFINITION OF DISABILITY A physical or mental inability to work PEOPLE MAY BE DISABLED DUE TO i) Accidents ○ When injured on the job, the provincial workers’ compensation plan usually provides a no fault benefit → employee holds employer harmless and won’t initiate legal proceedings ○ 90%+ accidents are not work related ○ SOME PROVINCES: people working in some occupations/are self-employed are not covered by the workers compensation plan and disability benefits can be purchased under the Accident and Sickness Insurance Policy ACCIDENT & SICKNESS INSURANCE AND TRAVEL INSURANCE THE CHANCE OF DISABILITY PEOPLE MAY BE DISABLED DUE TO ii) Sickness ○ Leading cause of disabilities ○ Workers compensation plan gives benefits WHEN workers contract an industrial disease ○ If sickness/disease occur naturally, benefits are only provided under Accident and Sickness Insurance ACCIDENT & SICKNESS INSURANCE AND TRAVEL INSURANCE THE CHANCE OF DISABILITY Workers Compensation Plans - A Brief Summary Provincial legislation requires employers in some industries be a part of the workers compensation plan All premiums ○ Support the plan ○ Are payable by employers and vary according to occupational risk Employee benefits usually start on the first day of disability AND ARE PAYABLE for differing benefit periods (depends on the disability) ACCIDENT & SICKNESS INSURANCE AND TRAVEL INSURANCE THE CHANCE OF DISABILITY Workers Compensation Plans - A Brief Summary MOST workers’ compensation plans give the below benefits for work- related disabilities ○ Any necessary health care costs Generally health care costs are covered by the provincial hospital/medical plan BUT some plans have no coverage for prescription drugs, physiotherapy, chiropractors, assistive devices AND ARE PAID IN FULL BY WORKERS COMPENSATION PLAN (WCP) ○ Any necessary medical/vocational rehabilitation program(s) WCP pays for cost of rehab incurred to restore (as close as possible) the employee’s mental or physical capabilities Sometimes there may be additional specific retraining to help the employee return to the workforce ACCIDENT & SICKNESS INSURANCE AND TRAVEL INSURANCE ○ Replacement for lost earnings for time missed from work Temporary disability → most provincial plans give a lost income benefit equivalent of 90% of employee’s net earnings Permanent disability → attempt to determine amount of future earnings lost Consideration is given to compensating employees for loss of former quality of life ○ A death benefit Basic funeral expenses, lump sum death benefit, monthly income to surviving spouse OR eligible dependants TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 1. Individual Insurance Candidates for purchasing their own accident and sickness insurance policy: Self-employed persons, people who don’t have a group plan at their work, high income employees, people looking for better coverage terms than what is provided through their group plan DISABILITY INCOME POLICY Disability Income Policy → most common INDIVIDUAL Accident and Sickness Insurance policy Provides monthly income to insured during period of disability caused by sickness/accident TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 1. Individual Insurance THE MEANING OF DISABILITY DEFINITION → A PERSON MAY BE DISABLED WHEN UNABLE TO RETURN TO WORK IN: ○ ANY occupation, regular occupation, own occupation BROADEST DEFINITION OF DISABILITY: “Own Occupation” coverage ○ If insured cannot perform the duties of their Own, regular occupation, full benefits continue to be paid EVEN IF the person is working at another occupation MOST LIMITED DEFINITION OF DISABILITY: “Any Occupation” coverage ○ No benefit payable if insured can engage in any occupation they reasonably fit by education, training, experience OR income PAYMENTS BEING after the Elimination Period is satisfied and continue until the insured recovers, dies, OR is at the end of the Benefit Period (whichever is first) TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS DEFINITION: ELIMINATION PERIOD ○ Period of self-insurance between onset of disability and commencement of disability benefits The LONGER the elimination period the LOWER the premium DEFINITION: BENEFIT PERIOD ○ Period that benefits are payable ○ 1, 2, 5, 10 OR “Until age 65” years TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 1. Individual Insurance THE MEANING OF DISABILITY Insurer sets own rules on MAX amount of income insured ○ Intent → ensures that people don’t have SO MUCH INSURANCE that they wouldn’t want to go back to work HOW PREMIUMS ARE DETERMINED - THREE FACTORS ○ i) Claims Costs → depend on: a) Type of policy Different types of individual accident and sickness insurance policies Some can be cancelled by insurer Additional can be charged for renewals Some policies are non-cancellable by insurer and have a guaranteed renewal premium TO AGE 65 TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS b) Applicant’s personal information ○ Age - the older the client base, the greater the potential for disability from sickness Insurers don’t usually provide accident and sickness insurance to those over 60 years ○ Sex - women usually suffer more AND longer disabilities than men ○ Occupation - some occupations are more dangerous and susceptible to accidents than others ○ Personal history - medical conditions, risky avocations and activities TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 1. Individual Insurance THE MEANING OF DISABILITY HOW PREMIUMS ARE DETERMINED - THREE FACTORS i) Claims Costs → depend on: ○ c) Type of benefits requested Usually the better the policy, the bigger the potential for bigger claim costs LIKE Benefit Period (1 year to age 65) Elimination Period (short periods vs. long periods) Definition of Disability (Policies that cover on an “own occupation basis” experience higher claim costs vs. “any occupation basis” ii) Operating Expenses iii) Investment Earnings ○ Insurer usually invests a part of premium received and RATE OF RETURN on the money is directly connected to the premium the insurer has to charge for products TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 1. Individual Insurance Characteristics of Individual and sickness Insurance Contracts 1. Application forms part of contract ○ Contract INCLUDES: application, policy, documents attached to policy when issued, and any amendments that are mutually agreed upon in writing after policy is issued 2. Insurable Interest Required ○ Contract is VOID if applicant has NO insurable interest when the contract would be in effect ○ PERSON WITH INSURABLE INTEREST in his/her own life OR Child, grandchild, spouse, employee, any person they have a pecuniary interest, any person that they depend on for support or education **If not the above persons, there IS insurable interest IF the person has consented in writing to the insurance TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 3. Incontestability ○ Statements on application are incontestable after two years EXCEPT: i) Fraudulent statements Deliberately withholding info on previous illness/disease ii) Misstatements of Age 4. Unpaid Premiums ○ Insurer may deduct unpaid premiums from a claim payment if the amount is still owing TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 2. Group Insurance Group insurance plans → employer buys a policy that covers all employees Two types of disability income i) Weekly indemnity ○ Short term coverage Payments usually for 13, 26, 52 weeks Payment from first day due to accident and may go until the 4th, 8th, or 15th day due to sickness ○ WHY DELAY PAYMENT? Insurance isn’t to insure colds, flu, or illnesses that take a few days or occur frequently TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 2. Group Insurance Two types of disability income ii) Long Term Disability ○ Start at end of Weekly Indemnity Benefit period and could continue until age 65 ○ COVERAGE OPTIONS Major Medical (Extended Health Care) Reimburse for expenses not covered by the provincial medical/hospital insurance plans ○ Prescription drugs, the cost difference between standard ward care and semi-private/private room hospital accommodation, special duty nursing costs, local ambulance costs, prosthesis, vision care, paramedical services, employee counselling TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS LIMITATIONS ○ Deductibles, yearly or lifetime maximums Dental Plan ○ Simple preventative maintenance to complex orthodontic work Accidental Death and Dismemberment ○ Operates the same as under an individual policy TWO TYPES OF ACCIDENT AND SICKNESS INSURANCE CONTRACTS 2. Group Insurance Two types of disability income ii) Long Term Disability cont’d ○ THE IMPORTANCE OF ACCIDENT AND SICKNESS INSURANCE - Description Loss of health - most important asset gone Loss of future earnings - health is impaired and future financial growth follows Loss of insurability - serious disabilities make buying insurance impossible Loss of assets - Ten years of average savings can be depleted in 3 months Loss of prestige and associates - you go from being an asset to the company to a liability Loss of peace of mind - Cannot pay present/future obligations Loss of credit rating - Who will lend a disabled party funds? TRAVEL INSURANCE The need for travel insurance Provincial and territorial health plans have reciprocal agreements BUT the plans are not all equal Policy term Can be purchased on a single trip or annual basis ○ SINGLE TRIP - cover one specific trip that lasts no longer than 180 days ○ ANNUAL POLICY - unlimited trips lasting for 30, 60, 90, or 180 days per trip Individual or family Can be purchased for an individual or for the whole family Rating Premiums depend on factors such as family or individual, single or annual policy, how many trips, duration of trips, areas of travel, policy limits, age and health of the individuals No standard policy - No two travel policies are the same TRAVEL INSURANCE Coverage territory Coverage may be active when an insured is more than 500 KMs from home OR may not respond until insured is outside the province or territory of residence Policy may be limited to Canada, North America, or may be worldwide Accident, Illness, Emergency DEFINITION ACCIDENT - unforeseen/unintended occurrence due to an external, violent, sudden fortuitous case out of insured’s control DEFINITION OF EMERGENCY - A sudden, unforeseen occurrence of a medical condition beginning during period of insurance, AND requires immediate treatment TRAVEL INSURANCE Dependent children Children are DEPENDANTS if they are under age of 20 (or 26 if attending an accredited educational facility), unmarried, residing and receiving full support, OR is dependant due to mental or physical infirmity Pre-existing condition Coverage doesn't (automatically) extend for illness or injury that existed before the start of the travel Some policies respond if the condition is under control for a specified amount of time (3 or 6 months depending on the condition) TRAVEL INSURANCE Coverage available Coverage usually is to pay for costs associated with accidents/injuries that require emergency hospital, medical, dental, prescription drug, air ambulance costs Incidental coverage Most policies cover (limited) because of accident or injury expenses incurred for non-refundable portion of pre-paid travel fees, trip interruption, hotel convalescence, return of auto, OR return of deceased Trip Cancellation Insurance ○ Protects insureds before date of departure Optional coverage Other policies like accidental death and dismemberment, non- medical expenses (lost baggage, tickets, passports, also legal counsel) TRAVEL INSURANCE Exclusions Pregnancy, miscarriage, childbirth within 8 weeks of expected due date OR high-risk pregnancy War Suicide, attempt thereat Commission or attempted criminal act Alcohol related illness or disease, drug misuse Playing professional sports Participating in hazardous activities AIDS Covered by Workers Compensation Statutory conditions Travel policies → subject to (applicable) provincial statutory conditions True or False? Students have three minutes to write a true/false question about what they have learned so far in the course in the chat window. No question is too simple! Remember the Forgetting Curve!

Use Quizgecko on...
Browser
Browser