Ch 8 Morbidity Risks Flashcards
mortality
number of deaths that occur at a given time, in a given group, or from a given cause
morbidity
prevalence of disease or disability w/in a population
mortality risk
risk of a particular individual dying, at any given time, when compared to other individuals of same age and sex
morbidity risk
risk of a particular individual contracting a disease, or other disabling condition, at any given time, when compared to other individuals of the same age or sex
base policy
benefits are paid under terms of the policy if the insurable event occur
-payable after defined benefit period of time, for defined length of time
conditionally renewable (non-traditional, cancelable)
company can change the premium, policy provisions, or cancel the policy as long as it does so for all insureds w/in a specific class who own the contract
-non-traditional, cancelable, most flexibility
-does not provide for guarantees or continuation of policy
-can include provisions for cancellation or adjustment under certain circumstances
-class defined by age, gender, specific waiting period, benefit period, occupation or policy type
guaranteed renewable (traditional)
insurance company cannot cancel policy, change any provisions, or add any restrictions as long as premiums are paid. Premiums cannot be changed for an individual but can be changed for all policies of that type or in that specific class
-less restrictive UW
-can include limited benefit period, longer elimination period, reduced benefit amount for certain conditions, some impairments excluded
Non-cancelable (traditional)
as long as premiums are paid on time, the company cannot cancel the policy, increase premiums, add restrictive riders, change policy provisions or make any changes to the policy w/o agreement of policy owner
-strict UW, greatest risk
-time limit, usually 65, unless working full time
-after 65: premiums not guaranteed, benefit period reduced, definition of disability is total, benefit riders are terminated
Own Occupation
definition of total disability, which defines total disability as insured’s inability, due to injury or sickness, to perform the important duties of his own occupation. Must be under regular care & attendance of medical practitioner
-disabled from own occupation, but can work in another job while receiving benefits
-restricted to certain occupations
-limited period
Regular Occupation
defines total disability as insured’s inability, due to injury or sickness, to perform the important duties of his own occupation. Must be under regular care & attendance of medical practitioner.
-not working any other reasonable occupation
-ineligible if able to work in occupation for which has been educated, trained or has experience w/ respect to duties required under that specific job
Any Occupation
defines total disability as insured’s inability, due to injury or sickness, to perform the important duties of any gainful occupation for which he is reasonably qualified. Must be under regular care & attendance of medical practitioner.
-adjudicator determines ability to work using relevant info in support of claim
loss of income policies
amt paid based on loss of income rather than loss of ability to perform duties
-must be directly attributable to injury or sickness, under appropriate care
-considers amount of income being earned in comparison to income prior to disability, does not consider if working full-time
benefit payment
payable on mo. basis for duration of disability and upon recovery and continued premium payment, policy remains in force
waiting period
amount of time that must elapse between the onset of a disability or loss of the ability to perform 2 or more ADLs, when proceeds become payable
benefit period
max length of time insured is eligible to collect benefits while on a disability claim
contractual exclusion riders
riders included in wording of every policy of a particular type and outline situations where benefits would not be payable. examples:
1. act or accident of war, military conflict
2. committing/attempting felony or engaging in illegal occupation
3. normal pregnancy/childbirth
4. transplant surgery, donor, during first 6 mos of policy in force
5. cosmetic surgery, during first 6 mos policy in force
key person insurance
designed to protect a business and replace lost profits in the event of the loss of key employee
key person
employee whose unique skill sets are considered so essential to a company that the employee would be difficult to replace if he was unable to work
Office Overhead Expense Insurance
disability business insurance in which monthly benefit payable contingent on covered business expenses incurred by business during each month of disability of insured owner. covered expenses:
1. rent
2. property taxes
3. utilities
4. depreciation
5. leased/rented equipment
6. business liability insurance
7. dues for professional associations
8. interest on debt
9. accounting fees
10. certain employee wages
11. other fixed expenses
Disability Buy/Sell
legally enforceable contract between 2 or more partners or shareholders that states who or what entity will be paid in the event a partner or shareholder leaves the business voluntarily, dies or becomes permanently disabled.
Underwriting considerations for DI
- Medical: more restrictive, many impairments that increase chance of disability w/o affecting mortality
- Avocation: Some avocations or hazardous sports warrant modifications to disability policies
- Occupation: 5 classes. Occupation/duties important to determine if eligible, type of product available, amt of coverage, rates to be charged.
- Financial: Consider earned income, insurable income, unearned income
Class 5 occupations
high level of education/training - includes most professional & white collar executives
-actuaries, engineers, lawyers, accountants
Class 4 occupations
white collar workers
-managers, clerical workers
Class 3 occupations
non-hazardous occupations, not working full-time at desk, spending time outside of office environment to perform duties
-plant managers, supervisors, superintendents w/ supervisory duties, newspaper reporters, insurance adjusters, auctioneers
Class 2 occupations
skilled or semi-skilled light manual work for established businesses in non-hazardous industries
-qualified/experienced tradesman, certified mechanics, electricians, plumbers, chefs, tailors, RN assistants
Class 1 occupations
moderate to heavy physical work, unusual hazards, skilled or unskilled workers w/ light duties in stable companies and industries
-drywallers, caretakers, transport drivers, ambulance drivers, heavy equipment operators, factory employees
