Unit 02 - Life/Health Insurance Underwriting

Question 1

What is backdating?

Answer 1

• Some insurers allow backdating and application so the premium could be based on the insured’s earlier age.
• Can backdate up to 6 months
• All premiums have to be paid for the backdated time

Question 2

Required signatures on an application:

Answer 2

The application form - signed by the applicants and the producer/agent

Question 3

What is the Producer’s Report / Producer’s Statement?

Answer 3

Part III of the life insurance application is the Producer/Agents Report or Producer’s Statement.
The producer records information the pertains to the proposed insured including the producer’s relationship to the proposed insured and anything the producer knows about the proposed insured’s:
- financial status
- habits, and
- character

* signed only by the producer, and is not part of the application. The insured doesn’t see this.

Question 4

Conditional Receipt

Answer 4

The date of the application is the effective date of the CONDITIONAL RECEIPT, as long as the applicant is found to be insurable under the company’s standard underwriting rules.

Most conditional receipts are effective on the date of the application, or the date of a required medical examination, whichever is later of these two events.

If applicant dies in the process, the process continues. If they would have been insurable the benefits are paid. If they are uninsurable, or substandard risk, no coverage would be in force and the premium would be returned to the policyowner or beneficiary (in the case of death).

Question 5

Binding receipts

Answer 5

Binding receipts are effective for 30-60 days from the date of the application even if the applicant is found to be uninsurable.

Question 6

Life insurance underwriting asks basic information. The three parts to an application are:

Answer 6

1. General Information
2. Health Information
3. Producer’s Report

Question 7

Part 1 General Information

Answer 7

• Name
• Address
• DOB
• Gender
• SSN
• Driver’s license number
• Marital status
• Income
• Occupation and business address
• Type of policy and face amount being applied for
• Beneficiary
• Other insurance owned

Question 8

Part 2 - Health Information

Answer 8

• Height and weight
• Tabacco usage
• Drug usage
• International travel
• Current medical treatments (details of most recent office visit)
• Medications being taken
• Conditions the insured has sought treatment for or been diagnosed with in the past
• History of disability claims
• Health conditions prevalent in the insured’s family
• High-risk hobbies (aviation, skydiving, scuba diving, auto/boat/motorcycle racing, mountain climbing)
• Name and address of current physician