Explain any four of the insurance terms underlined above - Leaving Cert Business - Question A - 2018
Question A
Explain any four of the insurance terms underlined above.
1. **Premium** - The premium is the fee paid for insurance to cover the risk by the policy holder to the i... show full transcript
Worked Solution & Example Answer:Explain any four of the insurance terms underlined above - Leaving Cert Business - Question A - 2018
Step 1
Explain the term 'Premium'
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Answer
The premium is the fee paid for insurance to cover the risk by the policy holder to the insurance company. This amount is calculated by the actuary and can vary based on individual risk factors.
Step 2
Explain the term 'No claims bonus'
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This is a reduction or discount in a premium available to policyholders who have not made any claims for a specified period, thus rewarding safe driving with lower premiums.
Step 3
Explain the term 'Loading'
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Answer
Loading refers to any extra charges/fees associated with higher risks. For instance, younger drivers or those with a poor driving history may experience increased premiums due to a higher likelihood of claims.
Step 4
Explain the term 'Insurance Policy'
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An insurance policy is a contract between the insurer and the insured, detailing the coverage provided, the terms, and conditions under which claims can be made, as well as any exclusions or limitations.
Step 5
Explain the term 'Policy Excess'
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This is the amount of money the policyholder must contribute towards any claims before the insurance company pays the remainder. It affects the payout structure in the event of a loss.
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