Chapter 12

Question 1

who sends the notice of death in a group insurance benefit?

Answer 1

employer or plan administrator

Question 2

if theres more than one beneficiary, do all beneficiaries have to complete the form?

Answer 2

yes

Question 3

what is the most common proof of death used by insurance companies?

Answer 3

death certificate

• issued by government
• provides name, DOB, DOD. cause and manner of death and circumstances of death.

Question 4

What are the 7 critical steps of processing a claim.

Answer 4

1. verify the coverage was in force at the time of the insured’s death
2. verify that the deceased was covered under the policy
3. verify that the insured’s death actually occurred
4. determine whether the cause of death is covered
5. determine if the policy is contestable
6. determine who is entitled to receive the policy proceeds
7. calculating policy proceeds.

Question 5

in what situations may it be difficult to verify if coverage was inforce when the applicant died.

Answer 5

1. during the NB process.
2. policy grace period
3. policy reinstatement process - usually cx needs to submit evidence of insurability, and payout doesnt happen unless reinstatement approved and premiums have been repaird

Question 6

the premium reciept usually includes a temporary insurance agreement (TIA) that offers temporary coverage until the insuere does what?

Answer 6

1. issues the policy
2. declines the application
3. terminates coverage under the reciept.

Question 7

what are some other examples of proof of death?

Answer 7

certified copy of the official death certificate or a document signed by a person with knowledge of the insured;s death.
*usually an office document is required

Question 8

what happens if you die outside of your country/

Answer 8

government body in that country will issue a death certificate- there may also be requirement from the US consulate in that country to issue additional verification of death in the form of a “report of death of an american citizen abroad”.

Question 9

what happens in the case of a disappearance?

Answer 9

if evidence exists that the insured was exposed to s apecific peril that can account for their disappearance and if no other suspicious circumstances or evidence of fraud exist then the court may issue a presumptive death certificate stating the insured is presumed death

Question 10

what are the 4 considerations a court will consider prior to issuing a presumptive death certificate ?

Answer 10

1. insured has been missing from home or suuala residence required in the jurisdiction
2. insured’s absence has been continuous and whetehr any factors such as large debt, crimal indictments exist that would cause for disapearance
3. diligent search for the insured has been conducted
4. the epople most liekly to hear from the insured have not hear from them

Question 11

how long must a person be missing - inorder for a beneficiary to apply to a court for a decleration of death and request a presumptive death certificate?

Answer 11

7 years.

Question 12

what happens at time of payout if a claims analysis has approved a claim by using a presumptive death certificate?

Answer 12

if premiums have been paid, the policyt proceeds as of the date specified in the death certificate are return, if the policy had lapsed during the specified period, teh claim would not be valid even with a presumptove death certificate.

Question 13

what is a suicide exclusion provision?

Answer 13

allows insurer to pay a reducted benefit equivalent to premiums paid if an insured commits suicide within a specified time period- usually 2 years- following the date the policy was issued.

Question 14

what happens when the proposed insured commits suicide during:

1. u/w process
2. suicide exclusion period
3. after the end of the suicide exclusion period
4. after the reinstatement of a lapse policy

Answer 14

1. the insurer relies on the language of the initial premium reciept. which usually contains the suicide provision. they return the premiums
2. insurer returns any premiums paid, but does not pay full policy benefits
3. the insurer pays the full policy benefits provided under the contract.
4. exclusion period specified in the original contract governs whether benefits are payable.

Question 15

What happens when an insured’s death is the result of an activity specifically excluded under the rider?

Answer 15

1) deny payment of death benefits and return the premiums paid
2) pay the policy’s cash surrender value.

Question 16

what is a change in health statement?

Answer 16

requires a proposed insured to notify the insurer in writing if his health or any material information in the application changes before the insurer delivers the policy.

Question 17

insurers can deny payment of a policy proceeds based on a change in the insured’s health between application submission and policy deliver if they can prove what?

Answer 17

1. change in health directly affected the degree of risk represented by the proposed insured
2. proposed insured knew of the change in health at the time of policy issue or delivery
3. change in health statement was unambiguous.

Question 18

when policy proceeds become payable, the insurer and the beneficiary enter into a settlement agreement. Here the person entitled to receive the policy proceeds is called what?

Answer 18

a payee

Question 19

in what situations can it be completed to pay the policies to the proper payee/

Answer 19

no beenfit
beneficiary has changed
policy has been assigned
beneficiary has died/dissapeared
insured and the beneficiary died sityltaneoulsy
conflicting claims for the proceeeds
policyowner-insured failed to change the dsignation of spouse after a divorce
policy is subhect to community property laws

Question 20

what is the typical order of eligible beneficiaries for group policies that dont have a beneficiary-

Answer 20

1. spouse of insured
2. children of insured
3. parents of children.
   > estate

Question 21

what is the simultaneous detaht act

Answer 21

law that specifies how benefits will be paid if both the insured and the beneficiary die under circumstances that make it impossible to dtermine which died first. mostly insurer premium that the insured surveiced the beneficiary unless the policy provides otherwise. thus funds go to contingent beneficiary.

Question 22

what is a survivorship clause?

Answer 22

stating beneficiary must survive the insured by a time period 30-60 days, for the beneficiary to be entitled to recive policy proceeds.

Question 23

what happens when theres conflicting claimants.

Answer 23

if they can handle ti themselves- the analyst will just need the directions written in a document to proceed with the payments.
if they cant, the claim department conducts investigations to determine who has a clerer claim to the policy benefits.

Question 24

what is an interpleader

Answer 24

legal process that allows an insurer that cannot determine the correct recipient of insurance policy porceeds to pay the proceeds ot a court, advise the court that the insurer cannot determine the recipient of the proceeds and ask the court to determine the proper payee.

Question 25

what are community property laws?

Answer 25

govern how spouses acquire and share property during a marriage.

Question 26

What is exculpatory statutes?

Answer 26

laws that permit an insurer to pay life insrunace proceeds according to the terms of a policy withour fear of double liability

Question 27

what are some examples of death benefit adjustments that may occur at claim time?

Answer 27

adjustments to benefit based on misstatement of age or sex. and this happens by adjusting the premiusm to the correct amount and deducting or adding that number to the finanal policy proceeds calculation.

Question 28

what are some factors that may add additional monetary value to the benefits?

Answer 28

unearned premiums paid in advance
policy dividends decalred byt not yet paid
policy dividends left with the insurer plys the instest earned on those dividends
interst earned on delayed claim payments
loan itnerest paid in advance

Question 29

what are some factros that may deduct monetary value to the death benefits?

Answer 29

premiums due but unpaid during grace period
amounts of outstanding on policy loans
interest on any policy loans
accelerated death benefits that have been paid

Question 30

define settlement options

Answer 30

death benefit pay out option where proceeds at distributed at the time pf death.

Question 31

what are some examples of typical settlement options for life insurance policies?

Answer 31

1. interest option- invested proceeds and paid out interrest on those proceeds
2. fixed-period option- equal instalkements over specified time period
3. fixed-amount option- equal instalments of stated amount until proceeds exhausted
4. life income optipn- periodic installments over the payee’s lifetime,

Question 32

what details are included on the disability information form submitted by the claimant?

Answer 32

1. initial date of the disability
2. cause of the disabulity
3. medical diagnosis
4. claimants occupation and job duties’
5. additional sources of disability income benefits and the names and addresses of providers of those benefits.
6. expected to return to work date

Question 33

How deos an accelerated death benefit work with a terminal illness?

Answer 33

amount payable prior to deay depends on the amount already paid out prior to the insurer’s death.
- lump sum

Question 34

How deos an accelerated death benefit work with critical illness claim

Answer 34

pay benefits ina lump sum or monthly installemtns over 6-12 months.

Question 35

How deos an accelerated death benefit work with a chornic illness/long-term care require

Answer 35

pay a percentage of the death benefit per month that the insured’ needs care. 2 percent. limited paid out in montly benefits usually subject to 90 waiting dat period.

Question 36

what are the steps in the reinsurance claim adminsitration process?

Answer 36

1. opens a claim notice with the following information: insured, loss incurred, reinsruace policy that the direct u/w had in force, reinsurance aggrangements that apply to the policy or policies under consideration.
   status of the claim, amoount of payment requested from the reinsurer for the claim
2. copy of claim form submitted
3. proof of loss-
4. proof of payment from direct writer company

Question 37

reinsurers create their own claim file. Define this

Answer 37

claim document that includes all information relevant to a claim under a reinsured policty.
direct writer- name, contact info, policy #
insured: name, gender, proof of loss, proof of claim payment
reinsurance arrangement - reinsured risk for the policy and claim activities.

Question 38

what does a reinsurance analyst confirm when reviewing the liability for a claim?

Answer 38

1. claim related to a policy covered by RI agreement
2. both the policy and the reinsurance agreement were in force at the time of the loss
3. any policy changes such as reinstatements or increase in coverage are adminsitered according to the parameter of the policy and RI agreeemtn
4. riders or provisisons in the policy have been properly adminitered according to tht terms of the reinsurance agreement so that the amount recoverable from the reinsurer is correct.

Question 39

if the claim involved retroceded coverage the naalyst creates a retrocession claim file. what is this?

Answer 39

contains all the infromation relevant to the claim plys the information baout the retrocession.

Question 40

what do you call the right to review a potential claim and offer an opinion about the assessment?

Answer 40

right of recommendation.

Question 41

what does netting offer mean?

Answer 41

process by which a direct writer subtracts the claim amount owed to it by a reinsurer from the amount the direct writer owns the reinsuere for premioums.

Question 42

when will insurer generally deny claims?

Answer 42

insured dies as a result of a condition specifically excluded by the policy
insured dies during contestable period and the insuere discovers a material misrepresentation int eh application for insurance.
a claimant does not provide acceptable proof of the insured’s death
the insurer has reason to suspectr that a claim is fraudulent.