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Insurance_Companie

The document provides an overview of insurance, explaining its definition, types, and how it works, including key terms like policy, premium, and deductible. It emphasizes the importance of understanding coverage, determining personal insurance needs, and the responsibilities and rights of consumers when buying insurance. Additionally, it highlights the risks of insurance fraud and the necessity of consulting licensed agents or brokers for informed decisions.

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LuckyAwmi
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8 views

Insurance_Companie

The document provides an overview of insurance, explaining its definition, types, and how it works, including key terms like policy, premium, and deductible. It emphasizes the importance of understanding coverage, determining personal insurance needs, and the responsibilities and rights of consumers when buying insurance. Additionally, it highlights the risks of insurance fraud and the necessity of consulting licensed agents or brokers for informed decisions.

Uploaded by

LuckyAwmi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Insurance basics

Insurance basics

This section covers:

• What insurance is
• How insurance works
• Why some people avoid buying insurance
• How you feel about life situations that might require insurance
What is insurance?

• A contract to provide compensation for certain losses


• Policy: a contract that says what is covered and what benefit you can
receive
• Insured: the person protected by the policy
• Insurer: the insurance company
• Policyholder: the person who holds the policy
• Premium: the amount you pay to buy insurance
What is and isn’t covered?

The policy spells out:

o The coverage
 The risks and items covered
 The maximum amount to be paid out
o The term: when the policy is in effect
o The deductible: an amount you pay before the insurer pays the rest
o Any exclusions: anything that is not covered
Summary of key messages

• Insurance is a contract (a policy) between a policyholder and an insurer


• The insurer pays compensation if an event in the policy occurs during the
term
• Insurance policies spell out what is covered
• Weigh the pros and cons and the emotional factors before buying insurance
Types of insurance
Types of insurance

This section covers:

• What the main types of insurance are and how they work
• How to determine your own needs for insurance
Life insurance

• Provides a payment when you die


• Beneficiary receives the payment
• Term life covers a fixed period of time
• Permanent life covers the lifetime of the insured
o May build up a cash value that you can withdraw
o Universal life combines life insurance with an investment
• Review your life insurance need regularly
How much life insurance you need
Health insurance

• Public health plans cover basic costs


• Other health insurance plans include:
o Supplementary or extended—for drugs and services not in public plan
o Disability—if you cannot work
o Travel medical—for treatment while travelling
o Critical illness—lump-sum payment for specific conditions
o Long-term care—expenses for long-term nursing
Home insurance

• Types include:
o Home insurance
o Condominium or co-owners insurance
o Tenant’s or renter’s insurance

• Can cover:
o Fire or damage to home
o Damage to or theft of possessions
o Accident or injury to others
o Living expenses while displaced from home
Vehicle insurance

• Mandatory insurance includes:


o Liability insurance for injury to others
o Accident benefits for own medical expenses

• Optional insurance includes:


o Collision for cost of damages to own vehicle
o Comprehensive for theft, fire, etc.
Other types of insurance

• Depending on your circumstances, you may want:


o Business insurance for small or home business
o Mortgage insurance to make payments or pay off mortgage
o Credit protection to pay bills if you cannot work
o Identity theft insurance to cover costs of restoring documents, etc.
• Some protection may be included in other policies
• May be many limitations and exclusions
Determining my insurance needs
Please refer to the Types of insurance section under the Insurance module.
Summary of key messages

• Investigate and choose which insurance products you need


• Read the policy to find out what is covered and what is excluded
• Consider:
o What you could lose
o Your financial situation
o How well you could cover your losses.
o How you feel about risk
o How much you can afford to pay in premiums
Buying insurance
Buying insurance

This section covers:

• Where you can buy insurance


• What questions to ask when purchasing insurance
• How to make an insurance claim
• What your rights and responsibilities are in buying and owning insurance
• How to avoid insurance fraud
Where can you get insurance?

You can buy insurance from:


• An insurance company
• An insurance agent
o Sells for one company
• An insurance broker
o Sells products from various companies
• A financial institution
o For certain insurance products
• An unlicensed lender or vendor
o For certain insurance products
Choosing an insurance agent or broker

• Deal only with a licensed agent or registered broker


• Ask questions:
o Experience, qualifications and training
o Professional associations
o Services after the sale
o References from other clients
• No fee for regular sales and services
Choosing an insurance company

Before you buy:

• Check that the company is licensed


o Check insurance regulator in your province or territory
• Check that the company is a member of Assuris
o www.assuris.ca
o Provides protection in case company becomes bankrupt
o Check how much of the policy is covered
Tips for buying insurance

• Shop around and compare coverage and price


• Buy enough coverage for the value you are insuring
• Don’t buy insurance you don’t need
o E.g., you may be covered through another plan
• Choose a deductible to balance your premium and possible losses
• Review the policy carefully
o Ask questions if you don’t understand
o Cancel within the grace period if necessary
Making a claim

• Contact insurer as soon as possible


• Provide all documents needed; e.g.:
o Police report from auto collision or theft
o Record of household possessions
o Death certificate for life insurance
• Make repairs to reduce damage when authorized by insurer
Consumer responsibilities

You have a responsibility to:

• Provide complete and accurate information


• Pay premiums on time
• Notify insurer of changes that affect the risk
• Maintain insured property in good condition
• Take reasonable steps to keep damage from getting worse
Consumer rights

You have a right to:

• Clear and accurate information about:


o Your policy and coverage
o How to settle a claim
o How prices are set
o How your broker or agent is paid
• Professional, fair service
• Timely resolution of claims and complaints
• Keep personal information private
Insurance fraud

• Fraud against an insurer pushes up insurance costs


• Fraud can result in:
o Criminal penalties
o Rejection of a claim
o Suit for costs and damages
o Rejection of future coverage
Summary of key messages

• You can buy insurance from an insurance company, agent or broker


• Consult an insurance agent or broker to determine needs and costs
• Shop around and negotiate for coverage at the best cost
• Read and understand the insurance policy
• Insured and insurer must provide complete and accurate information
• Insurance fraud pushes up the cost of insurance and is a crime
Action plan

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