Chapter 2: CI

Question 1

What can the benefits in CI be used for?

Answer 1

o pay for medical treatment (surgery)
o pay for nursing and other care
o pay off family debts
o help support dependants in future
Change in lifestyle

Question 2

What are the 4 characteristics of illnesses included in the CI cover

Answer 2

1. Perceived serious and to occur frequently by public
2. Condition can be defined clearly
3. Sufficient data available to price benefit
4. Avoids anti-selection (can use waiting periods to mitigate)

Question 3

Reasons for oferring tiered products

Answer 3

• Comprehensive product 😊
• Avoid windfall claims (claims that would not have triggered benefits under standard CI)
• Competitive product (differentiate from competitors)😊
• Comparability of products more difficultcan aid profitability
• Pay-outs match financial needlowers anti-selection 😊
• Multiple claims possible—higher PH satisfaction and retention😊