Chapter 7 Life Insurance Underwriting

Front 1

Insurable interest

Back 1

Requires that an individual have a valid concern up for the continuation of the life or well-being of a person insured. without this the contract is not a legally enforceable and would be considered a wagering contract. Insurable interest only needs to exist at the time of the application. An individual is considered to have unlimited insurability interest in themselves

Front 2

Application

Back 2

before x the insurance company usually filled in by the agent and medical examiner on the basis of information received from the applicant. It is signed by the applicant and is part of the insurance policy if it is issued.

Front 3

Application part 1 general

Back 3

ask general questions about the proposed insured including name, age, address, birth date, sex, income, marital status, and occupation. Details about the requested insurance coverage are also included in part one such as;

*Type of policy

*Amount of insurance

*Name and relationship of beneficiary

*Other insurance the proposed insured owns

*Additional insurance apps the insured has pending

* Other info ex: hazardous hobbies, travel, military service.

*Tobacco use

Front 4

Application part 2 medical

Back 4

the part of the application that focuses on the proposed insured health and asks a number of questions about the health history not only of the proposed insured but of the proposed insured family too. This medical section must be completed and its entirety for every application. Depending on the proposed policy face amount, this section may or may not be all that is required in the way of medical information. The individual to be insured may be required to take a medical exam and / or provide a blood test or urine specimen. Physical exams, if requested by the insurer, are performed at the expense of the insurer.

Front 5

Application part 3 agents report

Back 5

the part of the application where the agent reports personal observations about the proposed insured. Because the agent represents the interests of the insurance company, the agent is expected to complete this part of the application fully and truthfully. In part 3 the agent provides additional info about the applicants financial condition and character, the background and purpose of the sale, and how long the agent has known the applicant. The agent's report also usually asks if the proposed insurance will replace an existing policy. If the answer is yes most States demanded that certain procedures be followed to protect the rights of the consumers when policy replacement is involved.

Front 6

Medical information bureau

Back 6

Is a service organization that collects medical data on life and health insurance applicants for member insurance companies.

Front 7

Attending physician statement APS

Back 7

a report ordered by the insurance company and completed by The physician hospital or medical facility who has treated or who is currently treating a person seeking insurance. this is one of the most frequently ordered additional sources of medical background info and can be for a specific ailment diabetes broken leg and cetera or for general family doctor

Front 8

Inspection reports

Back 8

reports of an investigator providing facts required for a proper underwriting decision on applications for new insurance and reinstatement.

Front 9

Credit report

Back 9

a summary of an insurance applicants credit history made by an independent organization that has investigated the applicants credit standing

Front 10

Fair credit reporting act

Back 10

a federal law requiring an individual to be informed if he or she is being investigated by an inspection company. The law also outlines the sharing and impact of such information and requires individuals to be notified prior to being investigated

Front 11

Risk classification

Back 11

the grouping of different risks according to their estimated cost, likely impact, likelihood of occurrence, countermeasures required, etc

Front 12

Preferred

Back 12

is a risk whose physical condition occupation mode of living and other characteristics indicate a prospect for longevity for unimpaired lives of the same age

Front 13

Standard

Back 13

is a person who according to a company's underwriting standards is entitled to Insurance protection without extra reading or special restrictions

Front 14

Substandard

Back 14

a person who is considered an under average or impaired Insurance risk because of physical condition family or personal history of disease occupation residence and unhealthy climate or dangerous habits.

Front 15

Buyer's guide

Back 15

an informational consumer guide book that explains insurance policies and insurance concepts; in many states, they are required to be given to applicants when certain types of coverages are being considered. Byers guys are often used with life insurance long-term care insurance and annuities

Front 16

Policy summary

Back 16

a summary of the terms of an insurance policy including the conditions, coverage limits, and premiums. Policy summaries are often used with life insurance, long-term care insurance, and annuities

Front 17

Conditional receipt

Back 17

Is given to the policy owner when they pay a premium at the time of application. Such receipts bind the insurance company if the risk is approved as applied for, this is subject to any other condition stated on the receipt.

Front 18

Binding receipts

Back 18

are given by a company of pain and applicants first premium payment. The policy, if approved, becomes effective from the date of the receipt.

Front 19

Backdating

Back 19

is the practice of making a policy effective at an early date than the present. This is typically done to lower insurance premiums by ignoring a recent birthday. In most states agents are allowed to backdate up to six months, provided the insurer allows this practice.

Front 20

The USA Patriot act

Back 20

Was enacted in 2001and requires insurance companies to establish formal anti-money-laundering program. The purpose of the USA Patriot act is to detect and deter terrorism

Front 21

Representations

Back 21

statements an applicant makes as being substantially true to the best of the applicants knowledge and belief, but which are not warranted to be exact and every detail. Representations I must be true only to the extent that they are material to the risk.

Front 22

Warranties

Back 22

Statements that are guaranteed to be correct. a warranty that is not literally true in every detail, even if made an error, is sufficient to render a policy void.

Front 23

Constructive delivery

Back 23

Accomplished technologyif the insurance company intentionally relinquishes all control over the policy and turns it over to someone acting for the policy owner, including the company's own agent. Mailing the policy to the agent for unconditional delivery to the policy owner also constitutes constructive delivery, even if the agent never personally deliver the policy.

Front 24

Privacy notice

Back 24

Must be given to the applicant if looking into private medical information (HIPPA LAW)