Life Insurance PDF

UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS 18. Life insurance Life insurance is intended to pay an amount of money to the beneficiary (heir or third party beneficiary) upon death of the insured. With Personal insurance it is understoo...

UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS 18. Life insurance Life insurance is intended to pay an amount of money to the beneficiary (heir or third party beneficiary) upon death of the insured. With Personal insurance it is understood life insurance and personal accident. Life insurance is an insurance of person for life, accident or the occurrence of certain circumstances. For example, the occurrence of death, accident - disability (temporary or permanent), outlive, illness, marriage, the expiration of a certain period and others. Life insurance provides insurance only against risks associated with persons, which risks or circumstances can be summarized as: - death due to illness or accident; - disability (temporary or permanent) of the insured due to illness or accident; - temporary or lifetime payout of annuity / pension and health care costs. Life insurance Theory of insurance 1  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS Life insurance is insurance where the insured event has a direct impact on the insured person or occur concerning other circumstances (i.e. marriage, expiration of period, etc.). Voluntary health insurance and voluntary pension insurance belong to life insurance. Life insurance is built on a temporary and permanent (“for the whole life“) basis, respectively with "renewal" and "non-renewal" or for "death" and / or “outlive" Therefore, given the duration of the insurance life insurance can be classified as: A) Term life insurance (Срочно животозастраховане), which is sub-divided in: - Short-term life insurance (краткосрочно животозастраховане ); - Long-term life insurance (дългосрочно животозастраховане ). B) Permanent life insurance (Доживотно животозастраховане ). Life insurance Theory of insurance 2  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INSUSTRIAL BUSINESS Depending whether there is a saving element we can divide the types of life insurance into: Term insurance Cash value insurance (Pure insurance protection) (Protection and saving) Term insurance Whole-life insurance Endowment insurance Universal life insurance Variable life insurance Variable universal life insurance Life insurance Theory of insurance 3  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INSUSTRIAL BUSINESS a. Term life insurance (срочно животозастраховане) Term is considered “pure” insurance, where the premium buys protection in the event of death (from an accident, illness). There may be other risks added in the coverage. There is no saving element. No sum insured is paid after the period termination. Term policy has the sum insured and premium fixed for a period of time. These terms are commonly 1, 5, may be longer 10, 15, 20, 25 years. If during the period of time the insured dies insurer shall pay the agreed sum insured to the legal heirs and / or predetermined "beneficial owner". If the insured survive the agreed term of this insurance he did not receive any amount of the life insurance company. The policy may be renewed usually at a higher premium, according to the increasing age of the insured. This type of insurance is relatively cheap because by outlive the insurer does not pay the sum insured under the policy. Endowment life insurance Like in term life insurance policy is concluded for a fixed period, such as 10, 20 years. The insurer makes a payment in case of death during the period of the policy. A payment is also done in case of outlive of the insured. Life insurance Theory of insurance 4  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INSUSTRIAL BUSINESS b. Permanent life insurance (доживотно животозастраховане) The permanent life insurance is life insurance that remains in force, provides permanent protection of the insured. The two basic types of permanent insurance are: Whole life coverage and Universal life coverage. - Whole life insurance is a form of long-term life insurance and standard approach by permanent life insurance. Whole life coverage is insurance for death throughout the life of the insured with fixed premium payments (for the whole period or fixed period) and a cash value included in the policy guaranteed by the insurance company. The main advantage of whole life insurance is that it provides permanent protection of the insured. In addition, besides protection insurance is characterized by a savings element. The savings can be used to pay the premium on the policy, and in case of need by the insured. Life insurance Theory of insurance 5  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INSUSTRIAL BUSINESS - Universal life insurance is a form of long-term life insurance and is built on the basis of permanent life insurance where the premium payments/ installments can constantly be change and consequently the sum insured. The insured can choose the sum insured, depending on which the premium is determined. By any change the insured is aware of the insurance conditions – the new installments, the payment in case of an insurance event and the saved reserves. Another main feature of this type of insurance is that the interest that accumulates in respect of the sum insured is according to the current interest rate and the minimum size of the interest rate. Universal life insurance is intended to provide permanent insurance coverage with greater flexibility in premium payment, respectively the sum insured, and the potential for greater growth of cash values. There is a saving element. There are some other sub-types like: Life insurance Theory of insurance 6  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INSUSTRIAL BUSINESS Types of life insurance Variable life insurance (променлива животозастраховка) is permanent life insurance with variable sum insured, since its size depends on the results from the investment of premium reserves that are typically invested in bonds, shares and others. The insured has the right to determine how to invest their funds, respectively bear the consequences thereof in terms of the sum insured under the policy and the amount of payment in case of death. Variable Universal Life Insurance is a combination of "variable life insurance" and "universal life insurance". It combines the flexibility in determining the premium under the universal insurance and investment component of variable life insurance. Life insurance Theory of insurance 7  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS Sample coverage of Term life insurance: 1. Basic risks covered - Death by illness or accident; - Permanent disability or reduced performance, or certain type and degree of injury from an accident; 2. Additional risks covered on payment of additional premium - Death; - Permanent disability or reduced performance, or certain type and degree of disability; - Temporary disability; - Temporary disability during the hospital stay; - Funeral expenses; With respect to insurance event the coverage may be of: accident, occupational and domestic accidents, common or occupational disease, acute illness; Life insurance Theory of insurance 8  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS Excluded risks, for example: Suicide or attempted suicide; Alcohol, drugs and other; Pregnancy, abortion, infertility, childbirth and complications; AIDS; Disease treated last two months before the start of the insurance; Failure to comply with medical prescriptions; Prevention, rehabilitation and other services; Exercise of dangerous sports and others. Life insurance Theory of insurance 9  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS Example of Life insurance coverage 1. Basic risks - Outlive of a certain age (or fixed term); - Single or periodic payments of pensions or annuities; - Death; 2. Other risks from the types and sub-types of life insurance Life insurance Theory of insurance 10  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS 18.2 Annuity insurance or Penssion insurance (Рентно или пенсионно застраховане): "Annuity" is a contract between the insurer and the person (annuitant). Under this contract the insurer agrees to pay, usually monthly amount (rent) to the annuitant and for this purpose the annuitant pays a certain amount to the insurer. Annuity is a type of saving and investing, or investing savings through insurance, which aims to provide income to the annuitant mainly through his retirement age. It is effective only in the long-term investment, i.e. over a period of 10 and more years. When the rent is paid only during the specified period, we have term or temporary annuity (срочна или временна рента), and when it is not terminated, we have perpetual annuity (вечна рента). Life insurance Theory of insurance 11  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS Annuity insurance aims to support the insured mainly through his pensioner years, while life insurance has as a major goal to support after an unexpected death or accident. There are quite a few types of annuities. Some of the most common in the global insurance practice are: - Variable annuity is a pension insurance, where the rent is variable depending on the results from investing. Variable annuity is not guaranteed, its results are not guaranteed. - Annuity with annual premium payments (Annual Payment Annuity), respectively pension insurance with annual premium payment. - Fixed annuity is a contract to pay a fixed annuity, as it applies fixed interest rate for a specified period of time. - Immediate annuity - after one-off payment of a corresponding amount from the next month follows a monthly payment of rent. Life insurance Theory of insurance 12  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS 19. Health insurance Social security rights is one of the most important tasks of any state society. It is implemented in the following systems: through social security and health insurance. Social Security is built on state and / or public financing principle and consequently mandatory and / or voluntary principle in the form of additional insurance. Health insurance can be practiced by non-life and life insurance company. Health insurance is insurance that covers expenses that are a consequence of disease (illness), injury or disability, including general and preventive care for people. That is why health insurance has two main functions: - indemnification through multiple schemes; - general and preventive care for people. Health insurance Theory of insurance 1  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS Health insurance or "medical insurance" protects the insured against disability from accidental bodily injury (accident) or illness, i.e. provides monetary compensation for the costs to the insured for bodily injury or disease. These expenses generally consist of expenses for hospital treatment - doctors, hospital accommodation, medicine, radiology, ambulance service and many other necessary. Type of health insurance is "insurance against disability" (Disability insurance), where is paid a monthly sum to the insured who is unable to work due to accident or disease. Health insurance Theory of insurance 2  UNIVERSITY OF NATIONAL AND WORLD ECONOMY DEPARTMENT OF INDUSTRIAL BUSINESS Health insurance is exercised by a single and group policy. It is believed that its future significant development is in the field of group policy and private health group care. This explains that premiums will be paid by individuals and mainly by employers for groups of workers, including organized by labor unions, associations and others. The market generally predetermine the development of schemes at different levels of coverage, depending on the needs and possibilities of financing the respective health insurance. Health insurance Theory of insurance 3  УНИВЕРСИТЕТ ЗА НАЦИОНАЛНО И СВЕТОВНО СТОПАНСТВО КАТЕДРА ИНДУСТРИАЛЕН БИЗНЕС Example of coverage of health insurance Main cover – events of accident and illness of the insured person and includes financial payment of used during the policy period medical services and goods In outpatient and hospital conditions /в извънболнични и болнични условия/ up to a limit per insured. 1. OUTPATIENT MEDICAL HEALTH / ИЗВЪНБОЛНИЧНА МЕДИЦИНСКА ПОМОЩ 1.1. Medical examination / Медицински прегледи 1.2. Medical research / Медицински изследвания 1.3. Surgical treatment on an outpatient basis/ Оперативно лечение в амбулаторни условия 1.4. Manipulations / Манипулации 1.5. Device physiotherapy / Апаратна физиотерапия 1.6. Preparation of planned hospitalization / Подготовка за планова хоспитализация Здравно застраховане Застраховане 4  УНИВЕРСИТЕТ ЗА НАЦИОНАЛНО И СВЕТОВНО СТОПАНСТВО КАТЕДРА ИНДУСТРИАЛЕН БИЗНЕС 2. HOSPITAL MEDICAL HELP / БОЛНИЧНА МЕДИЦИНСКА ПОМОЩ 2.1. Hospitalization / Престой в болница 2.2. Medical examination / Медицински изследвания в стационара 2.3. Conservative treatment / Консервативно лечение 2.4. Surgery / Оперативно лечение 2.5. Consultation with specialists outside the hospital specialists / Консултации със специалисти извън щатния състав на болницата 2.6. Accommodation in better living conditions, including VIP Room / Настаняване в по- добри битови условия, включително ВИП Стая 3. Emergency aid / Неотложна помощ Здравно застраховане Застраховане 5  УНИВЕРСИТЕТ ЗА НАЦИОНАЛНО И СВЕТОВНО СТОПАНСТВО КАТЕДРА ИНДУСТРИАЛЕН БИЗНЕС ADDITIONAL (OPTIONAL) PACKAGES OF COVERED RISKS 1. Helping facilities / Помощни средства 2. Rehabilitation / Рехабилитация 3. Medical transportation / Медицински транспорт Excluded risks: Supplies for arthroscopic and laparoscopic operations / Консумативи за артроскопските и лапароскопските операции; Chronic and past illnesses / Хронични и предходни заболявания; Laser vision correction / Лазерна корекция на зрението; Band ligation of hemorrhoids / Банд лигиране на хемороиди; Choosing a team / Избор на екип; Preventive examinations and tests and other / Профилактични прегледи и изследвания и др.; Здравно застраховане Застраховане 6  УНИВЕРСИТЕТ ЗА НАЦИОНАЛНО И СВЕТОВНО СТОПАНСТВО КАТЕДРА ИНДУСТРИАЛЕН БИЗНЕС Пример покритие по здравна застраховка Основно покритие – случаи на злополуки или заболяване на застрахованите лица и включва финансово обезпечение на ползвани през срока на договора здравни услуги и стоки в извънболнични и болнични условия до определен размер на едно лице. 1. ИЗВЪНБОЛНИЧНА МЕДИЦИНСКА ПОМОЩ 1.1. Медицински прегледи 1.2. Медицински изследвания 1.3. Оперативно лечение в амбулаторни условия 1.4. Манипулации 1.5. Апаратна физиотерапия 1.6. Подготовка за планова хоспитализация 2. БОЛНИЧНА МЕДИЦИНСКА ПОМОЩ 2.1. Престой в болница 2.2. Медицински изследвания в стационара Здравно застраховане Застраховане 4  УНИВЕРСИТЕТ ЗА НАЦИОНАЛНО И СВЕТОВНО СТОПАНСТВО КАТЕДРА ИНДУСТРИАЛЕН БИЗНЕС 2.3. Консервативно лечение 2.4. Оперативно лечение 2.5. Консултации със специалисти извън щатния състав на болницата 2.6. Настаняване в по-добри битови условия, включително ВИП Стая 3. Неотложна помощ ДОПЪЛНИТЕЛНИ (ИЗБИРАЕМИ) ПАКЕТИ ОТ ПОКРИТИ РИСКОВЕ 1. Помощни средства 2. Рехабилитация 3. Медицински транспорт Изключени рискове: Консумативи за артроскопските и лапароскопските операции; Хронични и предходни заболявания; Лазерна корекция на зрението; Банд лигиране на хемороиди; Избор на екип; Профилактични прегледи и изследвания и др.; Здравно застраховане Застраховане 5