Grade 12 CuarTer @) —Tsugance OS por’ of risk management lL INTRO: ta THE OIPFERENCE BTW SHOeT + LONG TEEM CIiPe insurance’ © Snoer Teen Tr sueance Db "IN" cose Sometning happens (Fire tnete, Fladen) —O tease things could or may net happen bur to manage tne risk INCASE trey happen, tne insureel wants co be INdemnified be placed in Some Finorcio! pasition as was the case before tre incidert *° Lone Team Insueance —D Focuses on Financial protection against Nhe altering events (death, disability, retiverrent ) Individuals or @) sure, . Non - INsueet 1S % War = itis o rise that must be prevent it SASBIA Led ( South African Special Risk Insurance Association) was created tO insure risks like politica! unrest and terrorism, if it is Specified on Me Policy x Bad Debt ev opacie “© insurance trough Riskgroup is avarloble @ huge costX Business risks ie. Price changes, port delays, exchange te X Trading Stoo tak becomes obsolete (out of fashion) x Technology + macniney that becomes Outdoted connot bt insured ( possible sotution is leasing) x TMWegay activity - ; ws Mo ingurerce Por cov Fines, selling drugs xe. x Climo Chongs + Grea Icountry specific 2. Gemeeay Concests Reeneona Insucanct Teeninovoay a 2. i % berm > insur itt back in tne Einencial position they were in Berore tre incident —) the insured will not cuter losses (possible excess. 2.2 Security Leng term > paw is jive Financial scour i the insured ot retin rte tne insureds ants When helene dies or beaming disabled Sse insured Cor is ‘ > gies incorrect valve, we 2 . Clas value will NOG be peck aut. The nt id wesured ©) ox Indivic i® Not surercrenT (ENOUGH) EO Cover FUL EISic +. uw Nea Stine loss will nots be indemniF:eg. value of item = R10 0007) 0%. of the rise BuT asset insured fer ROOOO Was inguree i€ R2C00 damage in a Five —> nauone will only poy ©07. of E2000 = BIZ00 © ° ec 2 a situat «+. Where asset is ed. higher vale nes present vole | —> tre ingured will h a newe, -" if domage caused bo asset ONLY tre value oF asses is aid out by insurer ag the inSurect 1S ui it: From insuwenc: &g- a car P depreciating asset gets emien. Trneurance wit Pay the insurect_ ‘the acsent value (depreciated yeilue) 2.4 Excess > Rord or 7. of tre claim Stipulated the policy) that tne insured mouse py: Excess Y Premium Ain amount payable on every, Excess 1 Premiumy daim -: avoids perry claims, Peormare C mu, > tre erimory event or Series of events thot direckty leads to an insured loss2.6 SuBRoGATion iF tre insured person claimed from their insurance company... trey cannot claim from “guilty party” insuronce as well Lp it is up te te insuronce company to claim Fron “guilty parties” insurance. (mestiy cay insuronce) 2.7 _CESSION or TO Ceoe THe Forrcy DP snoula the insured (i ___ and _ need MONEY, tne poling may be signed over FOO creditor as colloteral in order to get tne loon. 3. Reaueements of A yvAUO insugance ConmTencr a. RAesowre Goon Fait > The insured must disciose all retevant info that moy affect tne risk {eit now, tne policy will be declared null and void (premiums lost and ne compensation) | tusuaners Dereesst * it cam be proven tnat helshe (tre insured will sustain Einancial loss if a cerenin event tomes ploce ie. & persens belonging, healtin, business partrers | e. Conenetun, Camper > A person is & sound mind ana legal age (iz)4. TYPES OF INSUZANCE ot jPULSORY TrisueAnce QO. Uneneovmenr Ingueance Funo Cure) * Snoet tern reset For tre unemployed or if a person is unable co Work from maternity leave or iliness - porente! leave + 10 days = adoption leave + children yougpy thon Z yrs ole! 7 Surragete. parenthood erro% 8177-12 * Contribution of 1s from employer + oF Jor gross Uh Grom employee. aed *# employer pays over we SARS * Exenonons: ~ employee wore Y Zunes per month ~ employer vino only earns commission ~ employer of national /previncial government * Bepiicaple to domestic worker (register @ pow) Deportment oF Labour * RuUES regarding claims: > to claim Fer max period muct contribute Gor U yews * ~ Revrenchment or lost job max period is 36S doys * WIE gives reviet to dependonts of employces that contributed to tne fund and dics. -eny UIE benctits ones bo them wil be paid out to dependants.“TB incorrect, OCCUPPTIONAL OMPENSATION For TnIMES and Orserse Per (Cola (previeusly known as Workmen's Compensation Fund ) o If wovner: = injured duc to work. Families or ill dependents con cleim - disabied Cpercioutorty if tre person is - dies the Breadwirner) ° Every Eurroreer registers > an_orrount is poi ANNUALLY tunat (Ss ENO ‘noone, akkacned ° © WUST ersure safe woking emironmet to mimi: + Amount psia to ©) wormed out as_l. oF whot they I iwne t © inform © oF injury ax 2. © sends claim ,yncdical info onc retevont Aocwmerks WITHIN 7 DFAS bo Compensatian comm: ssicney + WHEN 1S A CUMIN NOT pA a. House workers im PRIVATE residexe b- South Africon Berns ov SAC OWN Fund) © Te claim only gue im I2monwn + after eventANTAGES of CODA: © © wit receive Financial assistarce for medical expenses . en enedical care = © retuns sooner -: prockuasvity of n aaa Ten sate raiment, fev © carding tolan e Many safeoy requirement for arowding to Law le Challenging ond expensive bo implerrent c. Rorp Accident Funo (ere) * Covers AU road users + Pssists peope invowed In car accidents one will poy far rehab (ancdmeciical claims) RAE indemnifics tne ‘guilty party’ soneclain cun be mode qqgainst tran RAF poys winen: > Bry person injured in ~rotercer occidert Lpedestrion ord passenger ) -_Fomily of dearased person # Ccontributian) included in perraldiese! price Currently Wh = 2%, 1% per tre, other tay is * 177. (GEL: General Fret Levy) was orginally for road mointexe now Far gorernment cxperditne«4.2 NON _CoMPuLsoRY TNSURANCE Termmindogy : + Insured —p person|@ tmuing out poliay + Treurer > © providing aver + Premium -> paid by insured persan/@) tocoe risk determined py valucot asset + riscprofie Shore aver + Prticlesiztems-> value = Tpemium Prise = Boremiun ... ond vier vasa Le focatten of item, security etc. 0 Business Trsueance | Commeecia. Tinsueance > pravece 6B) from un foresean events ie. a. trere b. burglary C. public “liability (Limenity insuennce) consurner Slips ond falls d. damages duc to naturel disasters ©. pertial or total loss of incore (if@ corrot Function) Force mojeure <« “act of GoD” &. Concent ( trading scam, equipment etc.) g, Ovrmoge oF serucoure (BULOMG mSveANCE) Sometimes ... force by bars if mortgoge band) ; Financed 3 Alvernatively... rented — covered by tard forcl i€ high vise — theta YOoF [next tO petrei station Hen LUVPHS ALG COVERED a goniun nh Fi [SUR ANCE > namalty incduded In @) insuronce (soncermes Seprrote - content@ Housenao Trsueance. a. Content all hosehold assets Suuccural Trewronce | Building wsurerce > sucane of house b. © Viability, insurance (persan hurt on your property) P domoges in burglary 2 Verne Trsueance Z options: a. Fue comprenensive insurance ~ your cor + other persons Cor owered - tek > five b. THeo Paery Fiee ~ ‘unete dots not cover - Fire Obner persons car covered yourcor @ Money in TRANSIT INSURANCE ~P_ony losses frat may occur becween (6) org tre banc > some © won't tne vise ore get Exteenn® *© tronspet cash @_ Fioeuw Trsveance proves tne ©) againse losses incurred fron dishorst enpioye:s ye. thett of fraud Con be coker out on SPECIFIC PERSON DP FuPting Poricy - specific pasitian or wore© crop insueance —> specifically For Farrvers —P_paKen out w Cover riSKS thot may crise fron tineir_income generating assets Ne. drougrt, neat wove, Flood, Frost cet. ® LVESTONK INSUCANCE 18 alse availoble DIFFERENCE pew Tnsuernce ond Assueance “iease" vs “as long os neorralive TInsueance : Snore term ys ASSURANCE : Long tern | Types of assurance include, inter alia: © UBlassurance, which is cover forth loss fife. The policy exists for as long 35 you ae alive and eens Ping tho prem. © ([Teifiiassurance, which i ie cover that is vali or a specific periolterm. Its usualy taken to cover L ‘a person during a debt period, e.g. whilst paying @ bond on a house. L © Endowment, which is an investment policy that pays out after a specified time period, ¢9. ten years ; / © _Retirementtannuty (RAY! which is a policy taken out to provide an income (pension) on reaching : L retirement age (usually ftom 55 65) : | © Disabiycoverinich means te insured wil be pad out a catsn predetermined amount on disability, which may include the permanent loss of the use of a limb (leg, eye etc.) covered by the policy. [ © Trauma cover or dread disease (critical illness), which is a policy that covers @ list of serious. : L ilinesses, e.g. cancer, heart attacks etc. Should the insured suffer one of these specified esses, , L the policy will pay out the|predetermined amount of cover: : © Funeral cover, which is used to pay for funeral costs. ‘INsurance: The insured takes out INsurance IN case something happens. One will then be INdemnified (putin the same financial position as before the incident | <4 Insurance cover 9. fire, thet. t e “ASsurance: AS\sure as we are alive, each one will retire or dio. We need ASsurance | to provide secury to the Insured ors amy. Assurance coveralSABAAi Hk, 9, ratrement or death5. AOvANTAGES & DISAOVANTAGES of insueANce YY OV OF SticeT TEEM INSURANCES * ‘Transferring risk to the insurance company + Peace of mind, no worry of uncertainties + & person is able to purchase g car [house , tne insuronce Covers the risk for the bom + Cash pack bows Linsurey dependont) * insurance ther replace item in the event Something happans A Dispoy of sHoer TEeM insugance Expensive x Ensure all cover needed by insured is cnougihn * _ Tnsuronce compony tries vo Find every Excuse NOT TO PAty && AON o€ LONG TEeM INSURANCE + Ensures beneficiaries stardord of living is maintain in tne case of deotn o disability + Mov tgage loans hove life assuronce .. bono! is se ttiec) * Life assurance maxes provision For Futurcevents after tne date of the Poligy maturing Cie. terbory education) + Mectical Aid gives peoce of mird trot healthwill be Fine * Policies can be ceeded to obtain a loon * BR offer ton benctits A SPN oF Lone Teen insugan ce K Rigne life assurance 1S not alnays tanen.. Wosted money X% Over insured life cover Lis o maximum allowable sum) x __High odwnin + nonalling Fees (somevines)