Theory question 104
InsuranceCommerce 2 (essay, answer five questions only)
Explain the following terms used in insurance
(a) surrender value;
(b) cover note
(c) policy;
(d) re-insurance;
(e) group insurance.
Show the model answer
Model answer
(a) Surrender value – the amount the insurer pays if a life policy is discontinued before maturity.
(b) Cover note – a temporary document showing the insured is covered while the policy is being prepared.
(c) Policy – the formal document containing the terms and conditions of the insurance contract.
(d) Re-insurance – an insurer passes part of a large risk to another insurer to spread it.
(e) Group insurance – one policy taken by an employer covering all employees.
Explanation
One or two sentences per term.