Unit 2 Underwriting Flashcards
Most state laws allow life insurance applications to be backdated up to ____ months. If an application is backdated, the policy becomes effective as of the date requested on the application.
True or false: the applicant must pay any additional premiums that would have been paid from the backdate.
6 Months, True
Signatures:
The application form - must be signed by the ____ and ____.
- The ____ must sign if the applicant is not the insured
- A ____ must sign a corporation-owned policy
- A ____ signs a juvenile policy for the minor
- applicant
- producer
- proposed insured
- a company officer
- parent or legal guardian
Part 3 of a life insurance application is the Producer/Agents Report, or ____. The producer records information that pertains to the proposed insured including the producer’s relationship to the proposed insured and anything the producer knows about the proposed insured’s:
- ____
- ____
- ____
Producer’s Statement
Financial Status
Habits
Character
Producer’s Report: Does the proposed insured see the Producer’s Report?
Who signs the producer’s report?
No - it’s not attached to the policy or application when it’s issued.
Only the producer
An “____” insurance exists when the first premium is submitted with the life insurance application. If no premium is submitted with the application then coverage is ____ until the premium is paid for the issued policy.
Offer to buy
Delayed
When the first premium is collected at the time of application, the producer must provide the applicant with a ____. The effective date of coverage will depend on the type of ____ issued. (blanks are the same)
Receipt
The date of the application is the effective date of a __1__, as long as the applicant is found to be insurable under the company’s standard underwriting rules. Most __1__s are effective on the date of application, or the date of a required ____, whichever is later of these two events.
Conditional receipt
Medical Examination
With conditional receipts, if the proposed insured dies before a policy is issued, the application continues through the normal underwriting process and one of two things will occur: (2)
- If the application would have been approved, the policy continues in force
- If the application is denied, the premium will be returned
____ receipts are effective for 30-60 days from the date of application even if the applicant is found to be uninsurable. Rarely used with life insurance. Life insurance binders are called ____. The insurer can either issue a policy or cancel the binder before the end of the stated period.
Binding receipts
Temporary insurance agreements
Life Insurance Application
Part 1 - ____
Part 2 - ____
Part 3 - ____
Part 1 - General Info
Part 2 - Health Info
Part 3 - Producer’s Report
Name the 12 pieces of information in Part 1 - General Info:
- Name
- Address
- DOB
- Gender
- SSN
- DL
- Marital status
- Income
- Occupation and business address
- Type of policy and face amount being applied for
- Beneficiary
- Other insurance owned
Name the 11 pieces of information in Part 2 - Health Info:
- Height and weight
- Tobacco usage
- Drug usage
- International travel
- Current medical treatments
- 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
- Name and address of current physician
An underwriter may ask the proposed insured’s regular doctor for an ____(APS) to find out about the applicant’s current condition and medical history with the physician. The underwriter may also ask for copies of ____.
Attending Physician’s Statement
Medical records
The ____ pays for medical exams and tests that are requested during the underwriting process.
Insurer
Can an insurer request AIDS testing for certain amounts of insurance?
Yes
AIDS: If tested and the results are positive for AIDS, a report is sent to the ____(MIB). This info is never shared with anybody else unless designated. If nobody is designated, state law may require this info to be sent to the ____.
Medical Information Bureau
Department of Health
The ____ (HIPAA) imposes specific requirements on the disclosure of insured’s health information by medical providers, insurers, and producers. Applicants must be given full notice of: (3)
Health Insurance Portability and Accountability Act
- Insurer’s info-sharing practices
- Their right to maintain privacy
- An opportunity to refuse to have their information released
The __1__ is a non-profit insurance trade association that maintains underwriting information on applicants. When member companies discover unfavorable info about an applicant during their underwriting process, they report it to the __1__ using ____ signifying certain conditions. The purpose of the __1__ is to reduce instances of misrepresentation and fraud.
Medical Information Bureau
Codes
True of false: insurers can make an adverse underwriting decision based solely on the info from the MIB?
False
True or false: Insurers report underwriting decisions to the MIB?
False
True or false: Applicants must be given written notice that information may be reported to and obtained from the MIB and insurers must get an applicant’s written authorization to do so.
True
True or false: Applicants must also be notified that applying for insurance or filing a claim with another company may trigger the release of MIB information.
True
____ reports are reports containing info obtained by interviewing individuals who know something about the consumer such as associates, friends, and neighbors. Consumers must be notified and give their consent to having such reports done. These are also called ____.
Investigative Consumer Reports
Inspection Reports
____ risks mean average health and normal life expectancy and fall into the normal range anticipated by the company when it established its premiums. These risks can be insured for standard rates.
Standard Risks
