completing the application, underwriting and delivering the policy Flashcards
definition of insurance
is the transfer or risk of loss from one individual to an insurer
insurable interest
policyowner must face the possibility of loosing money or something in the event of loss
note: must exist between the policyowner & insured at the time of application
what are the elements of a contract?
- offer and acceptance (agreement)
- consideration
- competent parties
- legal purpose
what is consideration in a insurance contract?
the binding force, something of value that each party gives to the other
what is an aleatory contract?
the exchange of unequl amounts/values
what is a contract of adhesion?
“take it or leave it”, prepared by one party and accepted/rejected by the other
what is conditional, when referring to an insurance policy?
certain conditions must be met, insured must pay prem. and provide proof of loss in order for the insurer to cover a claim
what is an unilateral contract?
one party is legally bound to do anything
define warranty
an absolute true statement
what re representations?
statements believed to be true to the best of ones knowledge
note: questions answered on insurance application or representations
what is a buyers guide?
provides basic, generic info about life ins policies, explains amount & type of ins. to buy and how to compare the cost of similar policies.
note: must be given to applicant prior to accepting prem
what is a policy summary?
a written statement describing the features and elements of the policy being issued, must be given to insured when policy delivered
must contain the following: prem, cash value, dividend, surrender value, death benefit figure and specific policy years, name & address of agent, full name & office of insurer, generic name of basic policy, and each rider
fair credit reporting act
federal law that established procedures that consumer reporting agencies must follow to ensure records are confidential, relevant, & properly used. protects consumers from inaccurate circulation of info.
consumer report
fall under fair credit reporting act, contains info on consumers credit, character, reputation, or habits, collected by a reporting agency from employment records, credit reports, & other public sources
investigative consumer reports
falls under fair credit reporting act, similar to consumer reports, but info obtained through investigation and interviews with associates, friends, and neighbors.
note: consumer advised within 3 days report is requested, insurer/reporting agency has 5 days to provide additional info to consumer
if fair credit reporting act is violated unknowingly…
they are liable to the amount lost to the consumer as well as attorney fees incurred in the process
willfully violates fair credit reporting act…
fined a penalty up to $2,500
HIPAA - what does it stand for?
stands for health insurance and portability and accountability act
what is HIPPA?
a federal law that protects health information. patients have the right to view their medical info & know who has access to those records over the previous 6 years
what are the risk classifications and meaning of each?
preferred - better than average risk, low prem
standard - average risk, majority of insured’s
substandard - poorer than average risk, raised prem
declined - not insurable
what are the primary factors in premium determination?
risk, interest, expenses
premium payment modes, what are they?
4 modes: annual, semi annual, quarterly, monthly
who is the field underwriter?
the agent who solicits sale, completes application process, meets with client, delivers policy
what is the application and its parts?
basic source of info used in risk selection process
part I: general info
part II: medical info
agent’s (producers) report
