Chapter 5 Underwriting and Policy Issue Flashcards
True or False:
Underwriters determine whether an insurance application will be accepted?
TRUE
Agents are sometimes referred to as Field_____
Underwriters
Who has to sign each application?
Proposed insured
policy owner (if not proposed insured)
Agent
3 Risk types
Standard Risk
Preferred Risk
Substandard Risk
Standard Risk
normal, no extra rating or special restrictions
Preferred Risk
person who has great health, safe occupation, and good living characteristics to live a long life. cheaper rates
Substandard Risk
under average risk, bad health, dangerous occupation, bad habits. more expensive
3 sections of life insurance application
Part I- General (basic info)
Part II- Medical (physicians statement, can be RN)
Part III- Agents Report (agent observations)
Special Questionnaires
when underwriter requires additional info to properly assess risk.
ex. they are a skydiver
What does MIB stand for
Medical Information Bureau
nonprofit, provides reliable medical info for member insurance companies
If adverse info comes up on credit report resulting in coverage being denied or higher premiums the applicant must be notified in _____ days and given the name of the reporting agency used. If applicant requests a summary the insurer must provide it within ____ days?
3 and 5
How far back can an application be backdated and what are the benefits
6 months and to get them a better rate for being younger.
Term Insurance for Interim coverage is designed to….
allow immediate coverage and defer actual effective date of policy (usually 1-11 months) allowing insured to defer premium payments
Conditional Receipt
Given to owner when they pay premium at time of application which binds the insurance company.
Binding Receipt
Given by company upon applicants first premium payment. The policy if approved becomes effective from the date of receipt
