Unit 2: Underwriting Flashcards
Underwriting
process of evaluating a risk to determine if it is acceptable base on established insurance company guidelines
changes in application
must be initialed by the applicant
backdating
up to 6 months prior
application form signatures required
- insured
- producer/agent
- applicant, owner (if not the insured)
producer’s report
from agent to underwriter about anything they know about insured: financial status, habits, character
not attached to policy and never seen by insured
conditional receipt
the date of the application is the effective date as long as the application is found to be insurable under the company’s stand underwriting rules
premium is paid with application
insurance effective: later of
- date application completed and signed
- medical exam (if required)
must be standard or preferred risk-can be determined after death
Underwriting Application - general information
personal data regarding insured.
ex: name address DOB gender social security number driver's license number marital status income occupation and business address type of policy and face amount being applied for beneficiary other insurance owned
Underwriting Application - Health Information
designed to obtain information about the insured’s physical conditions and habits.
ex:
height
weight
tobacco 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
Underwriting Application - Medical exam
Attending Physician’s Statement (APS)
AIDS testing
HIPPA Disclosures
Medical Information Bureau
nonprofit insurance trade association that maintains underwriting information on applicants.
application cannot be denied solely on information obtained from here
insured must be informed of this
they get their its information from insurance companies
Underwriting Sources of Information
Application Medical exams and testing Attending physician statement (APS) AIDS testing Medical Information Bureau Consumer reports *must be informed Investigative reports *needs consent
Classification of Risks
Standard
Preferred
Substandard or rated
Declined
Standard Risks
average health and normal life expectancy
Preferred Risks
represent excellent health- risk of loss that is below average (favorable)
Substandard Risks
below average life expectancy, high risk life insurance
a risk of loss that is above average (unfavorable)
