Life Underwriting and Applications Flashcards
Application
Primary tool used to evaluate an applicant for insurance
Application is considered part of the contract and must be…
Accurate
Application Issues
Any corrections must be initialed by the applicant
Portions left blank on application that aren’t caught by the insurer will…
Waive the insurer’s right to that information
Required Signatures
Applicant and producer
In rare cases, application must also be signed by…
Insured person (if not owner); Parent/Guardian (if under 18)
Agent/Producer Report
Information from the producer about the applicant
Report must include…
Relationship to the applicant; knowledge of insurance being replaced; Understanding of applicant’s health
Preferred Risk
Higher than average life expectancy and low cost
Standard Risk
Average life expectancy and average cost
Substandard Risk
Lower than average life expectancy and high cost
Declined Risk
Uninsurable
Life insurers care about…
Hospitalizations, surgeries, Rx, specialist visits, family med history, tobacco use, conditions that impact mortality
Mortality
Life expectancy
Morbidity
Likelihood of disability
Attending Physician’s Statement
Info requested from applicant’s physician to clarify what’s on the application
Attending physician’s statement requires applicant’s consent and…
Can’t be shared by insurer for other purposes
Simplified issue policies won’t require…
Medical exam
Most policies will at least require basic tests for…
Drugs, nicotine and serious diseases
Extensive exams might be required for…
Large policies and/or inconclusive info on the application
HIV tests are common but must me done with…
Consent and remain confidential
HIV tests are paid by…
Insurer
HIV tests do not ask questions about…
Sexual history
MIB records can only indicate “abnormal” tests and can’t…
Explicitly disclose HIV status
Men have lower life expectancies than women and…
Generally pay more
Dangerous hobbies can be handled by…
Increasing the premium or excluding activity via a rider
Conditional Receipt
Provides temporary coverage while policy/application is being issued/evaluated
Temporary coverage starts either on…
Date of application or date of med exam, whichever is later
Conditional receipts require…
Prepayment and completed application
Conditional Receipt: Death will only be covered in the interim if…
Carrier would’ve otherwise accepted the applicant at the original premium
Effective Date
Date when the person has insurance
Effective Date: If application + first premium + conditional receipt =
Later of application or med exam
Effective Date: If application but no first premium…
When policy is delivered
Death before effective date isn’t covered, but…
Beneficiary might receive return of premium
If no prepayment occurred, payment must be received…
When policy delivered
If no conditional receipt was used…
Statement of good health must be obtained
Policy delivery might involve…
Providing summaries and buyer’s guides
Statement of Good Health
Meant to confirm that health hasn’t changed since application
Statement of good health is used when…
Application was submitted without first premium
Statement of good health is intended to be done immediately prior to…
Policy delivery
Backdating
Allows the applicant to be charged an amount based on a slightly lower age
Backdating is solely used for…
Pricing
Backdating can reduce the persons issue age at time of purchase up to…
6 months
Backdating requires a one-time payment based on…
Person’s actual age at purchase
