Life and Health Insurance
Life products
Life insurance pays a sum insured on death or survival - it is a benefit policy, so indemnity, subrogation, and contribution do not apply. Types include term assurance (pure protection), whole of life, endowment (savings plus protection), and annuities (income for life). Key concepts: mortality, morbidity, premium calculation (risk, expenses, savings), surrender value, paid-up value, and policy loans. Riders extend cover (critical illness, disability, waiver of premium).
Health and income protection
Health insurance covers medical costs; income protection pays a replacement income during incapacity, usually a proportion of earnings (commonly capped around 60–75%). Understand waiting/deferred periods, benefit periods, own-occupation vs any-occupation definitions, and pre-existing condition exclusions.
Traps
Confusing sum insured (agreed benefit) with indemnity; assuming contribution applies between life policies (it does not - multiple benefit policies may all pay); misreading the occupation definition in income protection; and forgetting the waiting period reduces short claims.
Rule of thumb
Life and health policies pay the agreed benefit on the defined event - no proof of financial loss, no subrogation. Check waiting periods and occupation definitions first.