Ch1.c Flashcards
A starting point and basic source of information used by the company in the risk selection process. Although they’re not uniform and may vary from one insurer to another, they all have the same basic components: Part 1 - General Information and Part 2 - Medical Information.
The application
the application includes the general questions about the applicant, such as name, age, address, birth date, gender, income, marital status, and occupation. It will also inquire about the existing policies and if the proposed insurance will replace them.
General information
Know this
Part 2 - Medical Information of the application includes information on the prospective insured’s medical background, present health, any medical visits in recent years, medical status of living relatives, and causes of death of deceased relatives. If the amount of insurance is relatively small, the agent and the proposed insured will complete all of the medical information. That would be considered a nonmedical application. For larger amounts, the insurer will usually require some sort of medical examination by a professional.
The agent is the company’s front line, and is referred to as a ———-because the agent is usually the one who has solicited the potential insured.
Field underwriter
Know this
As a field underwriter, the agent has many important responsibilities during the underwriting process and beyond, including the following:
Proper solicitation of applicants;
Helping prevent adverse selection;
Completing the application;
Obtaining the required signatures;
Collecting the initial premium and issuing the receipt, if applicable; and
Delivering the policy.
Know this
A life insurance producer is the company’s field underwriter.
provides the agent’s personal observations concerning the proposed insured
Agent producer report
Know this (required signature)
Both the agent and the proposed insured (usually the applicant) must sign the application. If the proposed insured and the policyowner are not the same person, such as a business purchasing insurance on an employee, then the policyowner must also sign the application. An exception to the proposed insured signing the application would be in the case of an adult, such as a parent or guardian, applying for insurance on a minor child.
Know this /changes on application
When an answer to a question on the application needs to be corrected, agents have the option, depending on which insurer they represent, of correcting the information and having the applicant initial the change, or completing a new application. An agent should never erase or white out any information on an application for insurance.
Know this consequence of incomplete application
Before a policy is issued, all of the questions on the application must be answered. If the insurer receives an incomplete application, the insurer must return it to the applicant for completion. If a policy is issued with questions left unanswered, the contract will be interpreted as if the insurer waived its right to have an answer to the question. The insurer will not have the right to deny coverage based on any information that the unanswered question might have contained.
Most agents attempt to collect the initial premium and submit it along with the application to the insurer. In addition, collecting the initial premium at the time of the application increases the chance that the applicant will accept the policy once it is issued. Whenever the agent collects premiums, the agent must issue a ————The type of receipt issued will determine when coverage will be effective.
Premium receipt
The most common type of receipt is a ———-which is used only when the applicant submits a prepaid application. The ———— says that coverage will be effective either on the date of the application or the date of the medical exam, whichever occurs last, as long as the applicant is found to be insurable as a standard risk, and policy is issued exactly as applied for. This rule will not apply if a policy is declined, rated, or issued with riders excluding specific coverages.
Conditional receipt
Know this
Conditional receipt means the applicant may be covered as early as the date of the application.
a practice of terminating an existing policy or letting it lapse, and obtaining a new one. To make sure that ———-is appropriate and in the best interests of the policyowner, insurance producers and companies must take special underwriting measures to help policyowners make informed decisions.
Replacement
