L&H 2 Flashcards
When should an agent obtain a statement of good health from the insured?
When the premium was paid upon policy delivery rather than at the time of application
Why: If the initial premium is not paid with the application, the agent will be required to collect the premium and a statement of continued good health from the insured upon policy delivery.
Conditions that increase the chance of a loss are known as what?
Hazards
Why: A hazard is any factor that increases the likelihood that a loss may occur.
What type of beneficiary can be changed at any point by the policyowner?
Revocable
Why: The policyowner may change a revocable designation at any time and without the consent of the beneficiary. Irrevocable beneficiaries, on the other hand, have a vested interest in the policy, so the policy owner may not be able to exercise certain rights without their consent.
Who is a field underwriter?
Agent / Producer
Why: An agent is the company’s field underwriter. The agent’s responsibility is to gather credible information from an applicant that would assist the company Underwriters in the risk selection process.
What information are the members of the Medical Information Bureau required to report?
Adverse medical information about the applicants or insureds
Why: The medical information Bureau (MIB) is a membership corporation owned by member insurance companies. The MIB allows insurers to share adverse medical information about insureds.
When can an irrevocable beneficiary be changed?
With the written consent of the beneficiary
Why: Once an irrevocable beneficiary is designated to the policy, the policyholder must obtain the permission of the beneficiary prior to making any changes in the policy.
What are the four elements of an insurance contract?
Agreement (offer and acceptance), consideration, competent parties and legal purpose
Why: For insurance contracts to be legally binding, they must have four essential elements: Agreement (offer and acceptance), consideration, competent parties and legal purpose.
In Insurance, when is the offer usually made on a contract?
When the insurance application is submitted
Why: The offer is usually made by the applicant in the form of the application for insurance. Acceptance takes place when the insurer approves the application and issues of policy.
What is a probationary period in group health insurance?
The period of time that must lapse before an employee is eligible for group health coverage
Why: The probationary period is the waiting period new employees must satisfy before becoming eligible for group health coverage.
What entities make up the Medical Information Bureau?
Insurers
Why: The MIB is a Membership Corporation owned by member insurance companies. The MIB allows insurers to share adverse medical information about insureds.