Underwriting Flashcards
Underwriting
process that insurers use to select, classify and rate risks, so that they accurately reflect the amount of risk undertaken
Field Underwriting
performed by the producer, face to face with the applicant
Applicant
as the person applying for the policy who fills out the application to be submitted
Policyowner
person who has all the ownership rights under the policy, pays the premiums, and accepts the policy when delivered
Insured
person who is covered under the policy
Beneficiary
named person(s) who receive the policy benefits
MIB
Medical Information Bureau: nonprofit trade organization which maintains medical information about individuals.
Classification of Risk
Preferred-above average
Standard - average
Substandard- below average
Declined- uninsurable
Premiums
Money paid for insurance is calculated on 4 factors;
Mortality, morbidity, interest earnings, expenses
Conditional Receipt
receipt issued when an application and premium are collected. Coverage is effective once certain conditions are met.
Insurability Receipt
A conditional receipt. Provides interim coverage as long as the applicant is insurable as applied for
Approval Receipt
A conditional receipt. Does not have interim coverage but coverage begins when the application is approved by the insurer
Binding Receipt
temporary insurance agreement provides coverage from the date of teh application regardless of whether the applicant is insurable. coverage last for 60-90days or until the insurer approves or declines the coverage. Mostly used in auto and homeowners insurance
Backdating
process of predating the application a certain number of months, up to a maximum of 6 months, in an attempt to achieve a lower premium
Errors and Omissions insurance coverage
producer protection from a situation that misrepresents the proposed coverage while selling
