C9 Other Insurances

Short-term general insurance products are different to long term policies as they are…

renewed annually, so insurer can decide whether to renew and on what terms

Personal accident and sickness is…

• benefit paid if off sick or had an accident

• normally annually but can be shorter

• standalone or an add on to household/travel etc

• a lump sum for death, permanent disability, loss of eye etc

PAS offers…

• refund of medical costs up to specified % in event of accident

• weekly sickness benefit - short deferred period and max term (26, 52, 104 weeks)

PAS exclusions includes…

• Under influence of drugs/alcohol

• Suicide

• Hazardous sports including wilful exposure to needless danger

• Normal pregnancy

• War/invasion

Group cover may be…

restricted to specific business-related activities and can be contributory or non-contributory

PAS taxation…

• no tax relief on premiums

• benefits paid out are tax free

• BUT if employer pays then the premium is benefit in kind and so the employee pays income tax

• allowable as business expense for the employer

For marketing purposes, the client must…

understand the terms, that it doesn’t substitute IP or CIC, and don’t confuse it with simplified IP

Private medical insurance is…

• cover against costs of medical treatment

• potentially enhanced cash payment rather the treatment

• aimed at acute conditions (rapid onset and curable)

• not for chronic long-term and managed

ABI sets out best practice for PMI as…

• using ABI definitions in policy documents

• customer being given required info

• core T&Cs explained in plain English

• specific information provided at point of sale

PMI offers…

choice, including timing, avoiding waiting lists, location and surgeon

PMI cover generally includes…

• Accommodation

• Nursing fees

• Drugs and dressings

• Doctors, consultants and anaesthetists’ fees

• Outpatient treatment

Budget/basic PMI plans feature…

• low cost

• no extra benefits

• limits on cover

• higher excesses

Standard PMI plans feature…

• longer claim periods

• higher cover limits

• more hospital choice

Comprehensive PMI plans feature…

• most costly

• home nursing

• private ambulance

• alternate medicines

• whole families

For PMI the insurer pays…

first part/part of treatment (excesses/co-payments), higher limits to lower premiums

Exclusions…

• War injuries

• HIV/AIDs

• Normal pregnancy

• Dangerous sports injuries

Types of PMI cover include…

• Single, joint, single parent, family

• Dependent children – at home, under 21 (25 if in full time education)

• Majority of market group cover

PMI has full underwriting or moratorium, which…

excludes pre-existing conditions within last five years for first initial period e.g. 2 years but then underwritten at claim stage where cover could be less than expected

For claims, medical evidence to prove need is provided by…

the insured

Payments are made to…

The hospital/surgeon tax free

UK PMI policies don’t usually cover…

overseas treatment unless international PMI policy, and short trips abroad are just covered by travel insurance

When travel to EEA, some cover for necessary treatment can be provided by…

a Global Health Insurance Card (GHIC) when waiting for treatment until back in UK would be unreasonable

International PMI includes…

GP services, chronic conditions, dentist and pregnancy/childbirth, but is expensive especially in US

Group PMI is…

• Available for selected employees

• Lower premiums than for individual contracts

• Reduced or no underwriting

• Taxable as benefit in kind for employee (if employer pays premium)

• Premiums allowable business expense for employer

PMI issues…

• increasing premiums = unaffordable

• group PMI easier to join

• pre-existing conditions - use caution if re-broking as conditions in existing policy may be excluded in new

• moratorium underwriting

MPPI is protection against…

inability to pay their mortgage in event of accident, sickness, or unemployment

Benefits of MPPI are…

• Payable for a maximum term of usually 12, 18 or 24 months

• Have a maximum benefit – % of mortgage costs, % of salary or fixed amount

• Not taxable