Life/health Insurance Underwriting Flashcards
Underwriting
The process of evaluating risk to determine if it is acceptable based on established insurance company guidelines
What needs to happen if a change in application information is made
Must be initialed by the applicant
Backdating
Most states allow you to backdate up to 6 months for the applicant to receive a less expensive premium. However he must pay any additional premiums that would have been paid from the back date
Producer/Agent report
Producer records pertaining to the proposed insured including producers relationship to the proposed insured.
Also financial status, Habits, character etc.
Conditional receipt
Premium paid with application
Insurance effective later of-
Date of application completed and signed
Medical exam (if required)
Must be standard or preferred risk
Can be determined after death
Binding receipt
Effective 30-60 days from the date of application even if the applicant is uninsurable. Mostly used with auto and homeowners insurance. Temporary
3 parts to life insurance application
General information
Health information
Producer’s reports
General information on life insurance application
Name, address, dob, gender, ssn, driver’s license number, marital status, income, occupation and business address, type of policy and face amount, beneficiary, other insurance owned
Health information on life insurance application
Height and weight, tobacco usage, drug usage, international travel, current medicine treatments, medications being taken, past medical conditions, history of disability claims, family health conditions, high risk hobbies, name and address of physician
Attending physicians statement (APS)
Underwriter may ask proposed insured’s regular doctor to find out about applicant’s current condition and medical history
Underwriting sources of information
Application Medical exams and testing Attending physician statement AIDS testing Medical information bureau (cannot be denied solely on MIB information) Consumer reports Investigative reports
Nonprofit insurance trade association that maintains underwriting information on applications from hundreds of insurers?
Medical information bureau
During underwriting process medical exams are paid for by
Insurer
Standard risk
Mean average health and life expectancy and fall into normal range anticipated by the company when it establishes premiums. Risks can be insured by standard rates
Preferred risks
Represent excellent health. Risk that is below average and favorable for the company
