The document discusses different types of life and health insurance. It describes key types of life insurance including term insurance, whole life insurance, endowment insurance, and annuity contracts. It also outlines types of health insurance such as disability income insurance and medical expense insurance, including hospitalization expense contracts, surgical contracts, regular medical contracts, and major medical contracts. The document provides details on benefits, premium structures, and exclusions for different insurance policies.
3. Life Insurance
• Every person faces two basic contingencies
concerning life, these are:
Physical Death
It is called pre-mature death.
It can be defined as the death of a family head
with outstanding unfulfilled financial obligations.
Economical Death
It is living too long
it means that the insured may outlive his
financial usefulness or his ability to provide for
his needs.
4. Continued……….
From this point life insurance can be defined
as:
a social and economic device by which a group
of people may cooperate to ameliorate (make
better) the loss resulting form the premature
death or living too long of members of the
group.
Life insurance is designed to provide
protection against these two distinct risks
premature death and superannuation.
5. Unique Characteristics of Life
Insurance
• The following are the unique characteristics of
life insurance in relation to other types of
insurance. Such as:
the event insured against is an eventual
certainty. it is not the possibility of death itself
that we insure against, but rather untimely
death.
life insurance is not a contract of indemnity.
the simple fact of the matter is that we cannot
place a value on a human life.
6. Continued……..
in life insurance the requirement of insurable
interest is applied some what differently than in
property and liability insurance.
life insurance contracts are long-term contracts.
Basic Types of Life Insurance Contracts
• The following are the main types of life insurance:
Term insurance
Whole life insurance
Endowment insurance, and
Annuities
7. Continued………
1. Term Insurance
It gives protection only for definite time.
is a contract between the insured and the
insurer whereby the insurer promises to pay
face amount of the policy to a third party
(the beneficiary) should the insured die
within a given period of time.
If the insured does not die during the period
for which the policy was taken, the insurance
company is not required to pay anything.
8. Forms of Term Insurance
• The basic forms of term insurance are:
a. Straight term insurance
is written for a year or for a specified number of
years and terminates automatically at the end of
the designated period.
b. Renewable term insurance
a type of contract under which the insured may
renew his policy before its expiration date
without making another medical examination .
9. Continued……..
c. Convertible term insurance
This insurance may be converted at any time
during a specified period into a permanent form
of insurance without taking a physical
examination.
2. Whole Life insurance
it is a permanent insurance that extends over the
lifetime of the insured.
In other words whole life insurance protects the
beneficiary when the insured dies, since the
contract can be continued in force as long as the
insured lives.
10. Continued……….
• Whole life insurance contracts may be placed
in two categories, depending upon the
premium payment period.
a. Straight life insurance
the premiums are payable for the remainder
of the insured’s lifetime.
b. Limited payment life insurance
the premiums are payable for the remainder
of the insured’s lifetime or until the
expiration of a specified period, if earlier.
11. Continued…….
3. Endowment Insurance
promises to pay a stated amount of money to
the beneficiary at once if the insured dies
during the life of the policy called the
“endowment period”, or to the insured
himself if he survives to the end of the
endowment period.
This is “you win if you live and you win if you
die” contract.
12. Continued…….
4. Annuity Contracts
Annuity is insurance against living too long or
against outliving one’s ability to provide an
income for oneself.
The person who life governs the duration of the
payments is called the annuitant.
Annuities can be classified according to several
characteristics.
a. Based on benefit payment:
immediate annuity
deferred annuity
13. Continued………
b. Based on premium payment:
Single premium annuity
Annual-premium annuity
c. Based on number of annuitant:
One life annuity
Joint lives annuity
Joint and last survivorship annuity
14. Health Insurance
• defined broadly as the type of insurance that
provides indemnification for expenditures and
loss of income resulting form loss of health.
• The loss may be the loss of wages caused by
sickness or accident, or it may be expenses for
doctor bills, hospital bills, medicine, etc.
Types of Health Insurance
• There are two types of health insurances:
Disability income insurance
Medical expense insurance
15. Continued…….
a. Disability income insurance
a form of health insurance that provides
periodic payments when the insured is unable to
work as a result of illness or injury.
It may pay benefits only in the event of sickness
or only in the even of accidental bodily injury or
it may cover both contingencies in one contract.
Certain types of accidents are excluded, for
example, losses caused by war, suicide and
intentionally inflicted injuries, and injuries
while in military service during wartime.
16. Continued………
b. Medical Expense Insurance
provides for the payment of the cost of
medical care that result form sickness and
injury.
Its benefits help meet the expenses of
physicians, hospital, nursing and related
services, as well as medications and supplies.
The medical expenses may be paid directly to
the provider of the services or the insured.
17. Continued……..
• Medical expenses insurance is divided into four
major classes:
1. Hospitalization Expense contract
is intended to indemnify the insured for
necessary hospitalization expenses, including
room and board in the hospital, laboratory
fees, nursing care, use of operating room, and
certain medicines and supplies.
is usually written for a flat daily amount for a
specified number of days such as 30,120, or 365.
18. Continued………
• The following are the main exclusions of
hospitalization contract:
Expenses resulting from war or any act of war
Expenses resulting from self-inflicted injuries
Expenses payable under worker’s compensation
or any occupational disease law.
Expenses incurred for purely cosmetic purposes
Services received in any government hospital not
making a charge for such services.
19. Continued………
2. Surgical Contract
provides set allowances for different surgical
procedures performed by duly licensed
physicians.
3. Regular Medical Contract
pays part or all of physician’s ordinary bills, such
as his calls at the patient’s home or at a hospital
or a patient’s visit to his office.
is written in conjunction with other types of
health insurance and is not written as a separate
contract.
20. Continued………
4. Major Medical Contract
Provides protection against the very large cost
of a serious or long illness or injury.