Completing The Application, Underwriting, And Delivering The Policy

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High Exposure Risk

applicants are not acceptable at standard rates because of physical condition, personal or family history of disease, occupation, or dangerous habits

Substandard Risk

applicants are not acceptable at standard rates because of physical condition, personal or family history of disease, occupation, or dangerous habits

Stranger-originated life insurance

is a life insurance arrangement in which a person with no relationship to the insured (a "stranger") purchases a life policy on the insured's life with the intent of selling the policy to an investor and profiting financially when the insured dies

buyer's guide

provides basic, generic information about life insurance policies that contains, and is limited to, language approved by the Department of Insurance

statement of good health

statement that must be signed by the insured, and verifies that the insured has not suffered injury or illness since the application date, if the initial premium was not paid when the application was completed

Representations

statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true.

Premium

the money paid to the insurance company for the policy of insurance

Insured

the person covered by the policy of insurance who may or may not be the applicant or policyowner

Policyowner

the person who is entitled to exercise the rights and privileges in the policy and who may or may not be the insured

Beneficiary

the person who receives the benefits from the policy of insurance

declined risks

Risks that the underwriters assess as not insurable

insurance transaction

Solicitation or inducement; Negotiations; Effectuation of a contract of insurance; Advising of an individual concerning coverage or claims

misrepresentations

Untrue statements on the application are

Agency contract

a contract that is held between an insurer and an agent/producer, containing the expressed authority given to the agent/producer, and the duties and responsibilities to the principal

Insurance Policy

a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events

Life Insurance

a coverage upon a person's life, and granting, purchasing or disposing of annuities

Investor-originated life insurance

a life policy written on seniors, usually 70 years and above, by investors who have no insurable interest in the insured

Agent/Producer

a person who acts for another person or entity known as the principal with regard to contractual arrangements with third parties; a legal representative of an insurance company

Applicant

a person who requests or seeks insurance from an insurer

Proposed Insured

a person who requests or seeks insurance from an insurer

illustration

a presentation or depiction that includes nonguaranteed elements of a policy of individual or group life insurance over a period of years

material misrepresentation

a statement that, if discovered, would alter the underwriting decision of the insurance company

policy summary

a written statement describing the features and elements of the policy being issued

warranty

an absolutely true statement upon which the validity of the insurance policy depends

Preferred Risks

individuals who meet certain requirements and qualify for lower premiums than the standard risk

Standard risks

persons who, according to a company's underwriting standards, are entitled to insurance protection without extra rating or special restrictions

adverse selection

risks which are more likely to suffer a loss

Agent's Report

the agent's personal observations concerning the proposed insured

Death Benefit

the amount paid when a claim is issued against a policy of insurance

coverage

the amount paid when a claim is issued against a policy of insurance

face amount

the amount paid when a claim is issued against a policy of insurance

face value

the amount paid when a claim is issued against a policy of insurance

Insurer

the company who issues a policy of insurance

Principle

the company who issues a policy of insurance

Underwriting

the process in which an insurance company determines whether or not a particular applicant is insurable, and if so, what premium to charge

Insurance transfers

the risk of loss from an individual or business entity to an insurance company, which in turn spreads the costs of unexpected losses to many individuals


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