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LOMA 301 I*STAR > Chapter 10 > Flashcards

Chapter 10 Flashcards

1
Q

What are some examples of routine customer service transactions?

A
  1. providing information
  2. changing names and addresses
  3. making policy changes
  4. processing premium payements
  5. providing duplicate copies of policies
  6. handling customer complaints
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2
Q

What are some situations where someone would request a change in name and/or address?

A
  1. triggered by misspelling

2. marriage, divorce, adoption, court order, citizenship.

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3
Q

what is typically required for a name or address change?

A

complete and sign a form to be added to the policy records.
beneficiary information/signature may also be required.
* may also require legal document
* may require court order

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4
Q

what are some triggers that would lead to a request for changes in a group life insurance plan?

A
  1. increase coverage for the addition of new employees

2. decrease coverage fo the loss of current employees through retirement

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5
Q

most policy changes fit into what 3 broad categories?

A
  1. changing the amount of coverage
  2. changing the type of coverage
  3. adding or deleting policy riders
    * usually requires a form to be completed.
    * cannot results in increased risk.
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6
Q

If an individual life insurance policy allows changes in coverage, the policy owner can typically do what?

A
  1. increase coverage- FA or benefit rider. depends on contract and may require additional UW
  2. decrease coverage- FA or removing rider. usually does not require UW
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7
Q

When would an insurer waive requirements, additional to a health declaration, during a request for a plan change to a low-premium plan

A
  1. health hx does not include impairments or health ratings
  2. height and weight are within current limits
  3. anweres on health deceleration section of the policy change form are acceptable.
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8
Q

What does the insurer’s service providers administer in terms of policy change requests?

A
  1. method/frequency of paying policy premiums changes
  2. premiums that increase automatically according to terms of contract
  3. follow-up when payments are due
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9
Q

When does an insurer typically reject a change for payment request?

A
  1. if the change results in a conflict between premium due dates and the policy anniversity date.
  2. if a policy includes a waive pf premium providsion and the premium is currently being waived.
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10
Q

What is an electronic funds transfer (EFT)?

A

method of transferring funds between financial intermediaries through an electronic computer network.

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11
Q

What is an electronic funds transfer arrangement?

A

policy owner signs an authorization form giving the insurer the right to withdraw funds to pay premiums from the policy owner’s bank account on or before the premium due date on an ongoing basis.

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12
Q

what is a grace period?

A

a length of time following each premium due date during which the cotnract remains in effect regardless of whether the premium is paid.
Usually 31 days.

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13
Q

what happens when a policy owner does not submit a premium payment to the insurer by the due date specified in the policy,?

A

the insurer sends the policyowner a policy grace notice- or lapse notice, which is written notification that the policy’s grace period is about to expire.

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14
Q

what is a late-payment-offer?

A

an insurer’s conditional offer to waive its rights to timely payment of a policy premium.

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15
Q

What happens when a policy owner request a dupliucate copy of an insurance contract?

A

insurer reuqired a writen signed lost policy request stating the policy is lost or destroyed or is otherwise unable and has not been assigned, transferred, or encumbered in any many.

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16
Q

IF a CSR cannot verify the loss, he usually will issue a certificate of coverage rather than a duplicate policy. What is this?

A

its a document that verifies that coverage exist, but does not contain all the provisions and riders contained in the original policy.

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17
Q

What do you call most of the complaints handled by an insurance comapny’s customer service staff?

A

service complains

relate to the timeliness, accuracy, courtesy, and professionalism of the company;s interractions with its customers.

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18
Q

the reciept of a service complain typically triggers what actions?

A

service recovery
the comapnies activities designed to fully resolve the problem that caused a customer’s dissatisfaction and restore the customer’s good will.

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19
Q

What did insurers train thei CSRs to do during a service recovery?

A
  1. respond to the complain objectively and not personally
  2. ensure complains are hanlded accurately and claifying or summarizing customers complaint
  3. acknowledge the customers’ feelings and concerns by empathizing with the customer.
  4. work with customers to identify the cause of the complain by asking questions and controlling the dialogue
  5. offer a resolution that statisfies the customer and complies with company regulations.
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20
Q

What is an escalation process?

A

procedures that specify how an issue or complain is to be handled in situations where the CSR was not able to address a request/demant.

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21
Q

What is a complaint team?

AKA problem resolution team

A

group of experiences CSRs and/or staff from law and compliance division, who are dedicated to resolving customer complaints, and reviewing patterns. they may recommend changing procedures.

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22
Q

what are some examples of complex policy service transactions?.

A 
benefit changes
policy assignments
policy conversions
policy dividend payments
policy loans
policy terminations
policy reinstatements
administration of variable life insurance products.
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23
Q

What is a revocable beneficiary

A

beneficiary who has no right to the policy proceeds during the insured’s lifetime because the policyowner has unrestricted right to change the designation

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24
Q

what is an irrevocable beneficiary

A

beneficiary who has a vested interest in the policy proceeds during the life of the insured. the policyowner has the right to change the beneficiary with the current beneficiary’s concernt or upon their death

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25
Q

what is a contingent beneficiary?

A

the party designated to receive the proceeds of a life insruance policy following the insured’s death if the primary beneficiary precedeases the insured.

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26
Q

what is a concurrent beneficiary?

A

two or more life insurance beneficiaries who share the policy proceeds on the death of the insured

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27
Q

Life insurance beneficiary designation that identify certain groups rather than individual persons is called class designation can categorized into which two kinds?

A
  1. per stirpes beneficiary designation - the descendants of a decrease class memeber takes the deceased class member;s share of the policy proceeds by representation. heirs included for shares.
  2. per capita beneficiary - class in which the class memebers all stand in the same relationship to the policy owner and the class memebers who survive the insured share in teh policy proceeds equality. surviving split- no heirs.
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28
Q

In order to avoid future complications at claim time, insurers require that CSR’s do what at the time of a beneficiary change request?

A
  1. know the full name, of the beneficary
  2. relationship to the beneficiary to the policy owner (insurable interrest)
  3. date of birth of the beneficiary
  4. any other identification information - such as address/Social security number) that would enable the insurer to locate the beneficiary.
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29
Q

What information is needed for a tryst beneficairy?

A
  1. date trust was established
  2. legal name of the trust
  3. legal name and address of trustee.
    * possibly trust agreement copy
30
Q

Can you change the beneficiary over the phone?

A

no

31
Q

what is an assignement?

A

an agreement under which a policyowner- the assignor- transfers some or all ownership rights in a particular policy to another party- the assignee.

32
Q

Assignments can take one of two forms: absoulte assignement or collateral assignement. What happens under the terms of an absolute assignement?

A

policy owner irrevocably transfers all rights under a life insurance part to another person/entity.

  1. right to receive proceeds
  2. right to change a revocable beneficiary desgnation
33
Q

what happens in an absolute assignment if there is an irrevocable beneficiary?

A

the assignor must obtain the bene’s consent to enter into the absolute assignment

34
Q

Assignments can take one of two forms: absoulte assignement or collateral assignement. What happens under the terms of collateral assignment?

A

policy owner temporarily transfers monetary valye, but not all ownership rights, in a life insurance polucy to another person as collateral- or security- of debt.

35
Q

Do insurers have the rights/involvement in an assignement?

A

No, but they do generally require a policyowner to complete an assignment form,.
- protects them from paying policy proceeds to the wrong person.

36
Q

what is a conversion provision?

A

allows the owner to change the type of coverage provided by the policy withour providing evidence of insurability.

37
Q

Are conversion provisions also included in group contracts?

A

yes, to allow for a group insured, covered dependent or both to convert coverage under group insurance contract to an individual life insurance policy without providing evidence of insurability.

38
Q

what is the difference between converting group coverage and individual coverage?

A

group often exclude the option of converting while life coverage to term.

39
Q

when is conversion of coverage under a group insurance contract typically allowed?

A
  1. group insured is no longer employed by the sponsor company or because the insured is no longer a memeber of a class eligible for coverage.
  2. group insured dies- dependents are still covered under group plan.
  3. covered dependent under a group insurance plan no longer qualifies for group coverage
  4. group policy terminates or is amended so that coverage of any class of group insureds ends.
40
Q

any group insured or dependent who has been insured under group policy for at least 5 years must be offered what?

A

smaller of

  1. 10K indi coverage
  2. difference between the amount of group life insurance that terminated and the amount of group life insurance for which the indi becomes eligible within 31 days after termination of the group policy.
41
Q

what is a participating policy?

A

an insurance policy that may pay the policyowner a policy dividend when the insurer experiences favourable financial results.

42
Q

A policy dividend is the policyowner’s share of the divisible surplus. what is this?

A

the portion of an insurer’s earnings that is available for distribution to the owner of participating policies after the company sets aside funds for contractual obligations, operating expenses, contingencies, and general business purposes.

43
Q

what are some examples of the most common dividend options?

A
  1. receiving cash payments of dividends on a periodic basis, usually quarterly or annually.
  2. allowing dividends to accumulate at interest
  3. applying dividends to pay some or all of the premiums on a participating policy
  4. applying dividends to a pay some or all of an outstanding policy loan
  5. using dividends to purchase additional insurance.
44
Q

Owners of a cash value life insurance policy can obtain funds by means of a policy loan. How does this work?

A

considered a cash advance of a policy proceeds the policyowner is entitled to recieve under the terms of the contract.
they can repay the loan, but are not obligated too. if not paid back the claim is deducted by the amount of the loand, and interest.

45
Q

What does a CSR do when a policy loan request is received?

A
  1. check eligibility
  2. compare signatures of the request and policy.
  3. verify cash value is large enough to cover the request.
46
Q

Although repayment ona policy loan is not required, insurers typically offer them a choice of repayment plans. what are the options?

A
  1. lump-sum plan- entire loan + interrest
  2. partial loan repayement:
  3. coupon plan- supplies owner with coupons to return with periodict payements agaisnt the loan amount
  4. dividend plan- insurer applies available dividends plus future dividends agaisnt the loan
  5. automatic deduction plan- policyowner allows automatic deduct of set amount each month from personal bank account.
47
Q

Name of automatic termination

A

lapse

48
Q

What is a net cash surrender valye?

A

cash value of life insruance policy in the amount of the cash value a policy owner is entitled to receive upon surrender of the policy.
net value

49
Q

define the term plys and minus when calculating cash surrender values

A

+ increases in value created by paid-up aditions, policy dividends, advance premium payments
- outstanding policy loands and charges imposed on the surrender.

50
Q

How does someone initiate a surrender?

A

submit a complete and signed surrender request form, and sometimes the policy.

51
Q

Insurers may allow some policywoners to reinstate a lapsed policy. what does this mean?

A

the process where an insurer puts back into force a life insurance policy that has either been terminated d/t nonpayment or premiums or has been continued udner the exntended term or reduced paid-up insurance nonforfeiture option.

52
Q

When would a reinsurer not allow for reinstatement

A
  1. application terminated the policy

2. policy owner surrended a policy for net cash surrender valuye

53
Q

What are some typical requirements for a reinstatement.

A
  1. application/request form
  2. made within a timely manner (2-5 years)
  3. evidence of insurability in the form of a medical
  4. premiums are owed on the policy * IC
54
Q

What is variable life insurance (VL)

A

form of cash value life insurance in which premiums are fixed, but the death beenfit and other values very in response to the perfromance of the subaccount investment backing the contract.

55
Q

What is variable universal life insurance (VUL)

A

form of cash value life insurance that companies the premium and death benefit flexibility of universal life insurance with the investment flexibility and risk of variable life insurance.

56
Q

what do you call the acitivities involved in acheiving the goal of keeping policyowners satisfied and policies in force?

A

conservation, process of ensuring that policies do not lapse but are retained on an insurer’s books for as long as possible.

57
Q

What are the focus points of conservation efforts?

A
  1. policyowner communications
  2. financial professional engagement
  3. management of unassigned policies
  4. superior claim service
58
Q

What are some steps insurers can take to improve conservation via communication with policyowners?

A
  1. do it at the right time
  2. on a regular schedule with regular follow-ups
  3. through the right channels.
  4. in the right format
  5. with the right payoff
  6. keep financial professions up to date with information about policy owner payments (on flex premium policies)
  7. provide annual reports
  8. sending notices
  9. offer termination alternatives
  10. offer communication services
  11. surveying policy owners
  12. up to date taining
  13. testing effectiveness of communication
59
Q

The primary cause of policy lapse is the lack of connection between financial professional and a policyowner. How are insurers addressing this issue?

A
  1. recruiting the right professionals
  2. providing professionals with information and requirements so present the correct realistic expectations to cx
  3. up to date training and check-in’s. annual reports
  4. rewarding long-term relationships to professionals who upkeep the contact
60
Q

What is the term given by an insurer to a policyowner who bought a policy with the assistance of a fianncial professional but who current has not relationship with the person who sold the policy.

A

unassigned policyowner.

61
Q

how do insurance company’s strengthen its relationship and ensure its continued business following a claim?

A
  1. providing fast, easy way to contact the company and submit a claim
  2. delivering a clear explanation of the claim process and any requirements a claimant must satisfy
  3. offering personalized treatment to policyowners and beneficiaries.
  4. processing claims quickly and accurately.
62
Q

measurements to evaluate customer service performance can be either quantitative or qualitative. Define quantitative performance measures

A

numerical methods to track and report objective results

- speed, frequency, assuracy.

63
Q

What is the most common method insurers use to gather quantitative information about their service?

A

survey
gathers data about customers attitudes, knowledge, buying behaviour, and preference towards a particular product, serrce, or admin process.

64
Q

What are some examples of quantitative measures of customer service performance when assessing service level/accessibility to the cx?

A 
service level -
number of block called
average speed of answer
abandonment rate
misdirected calls
65
Q

What are some examples of quantitative measures of customer service performance when assessing timeliness?

A

turnaround time

first contact resolution

66
Q

What are some examples of quantitative measures of customer service performance when assessing quality

A

quality rate

error rate

67
Q

What are some examples of quantitative measures of customer service performance when assessing productivity

A

processes completed- # of transactions/time

68
Q

measurements to evaluate customer service performance can be either quantitative or qualitative. Define qualitative performance measured?

A

focuses on behaviors, attiude, opinions, and are sued to determine how efficienctly and effectively processes and transactions are being completed.

69
Q

How do insureres often gather qualitative performance information?

A
  1. surveys - open ended questions.
  2. observations and monitoring
  3. mystery shoppers
  4. complaints monitoring
70
Q

What is a mystery shopper?

A

trained evaluator who approaches or calls a company’s customer service unit and pretends to be a customer.
- allows for flexible assessments

71
Q

the in-depth process of capturing customer’s expectations, preferences, and aversions is known as what?

A

the voice of the customer

- used to identify potential problems or trends in service

LOMA 301 I*STAR (12 decks)

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