Life insurance Underwriting and policy issue

medical report

"nonmedical limits" on small face amount. (older age 50,00 while younger is 100,000). APS may be required. when exams are done this is sent back to insurer for review.

applicant must be notified in WRITING that insurer may make a report on their health to the MIB

MIB rule 1?

applicants must sign authorization forms for information from the MIB files to be given to a member company.

MIB rule 3?

MIB will disclose any information it has concerning an applicant upon request by applicant.

MIB rule 4?

medical info will only be disclosed to the individual's physician.

MIB rule 5?

policy summary

addresses specific policy being presented. it identifies the agent, company, the policy and each rider. also includes info on premiums dividends and benefit amounts. cash surrender values. policy loan interest rates. cost indexes of policy being considered.

part 3 agents report

agent's personal observation on insured. background,character, purpose of sale. how long has the agent known the applicant? will this application replace existing policy? if yes more documentation needed.

proper solicitation completing application fully and accurately. obtaining appropriate signatures collecting initial premium and issuing receipt.

an agent, as field underwriter initiates the process and is responsible for?

FCRA rule 1

applicant must be notified within 3 days that a report has been requested. if applicant requests disclosure summary must be provided within 5 days of request.

HIPPA (health insurance portability and accountability act)

imposes certain requirements on health care providers in regard to the disclosure of patient's health and medical information.health care providers must preserve patient confidentiality and protect this info.

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in florida how old must a child be to sign a life insurance application?

buyers guide and policy summary before the insurer accepts the applicants initial premium.

in florida insurers are required to deliver what to the applicant?

agents license number and name of insurance company

in florida what must appear on the first page of the application?

preferred risk

lower than standard premium for exceptionally good risks. nonsmoker, ideal weight range, favorable cholesterol levels.

statements made in application

to evaluate risks agents use?

is the applicant insurable? does insurable interest exist?

two questions must be answered for underwriting?

if policyowner is different than insured both must sign. or if owner is a corporation, one or more partners other than insured must sign.

what are the required signatures?

statement that is considered literally true. a warranty that is not literally true in every detail can void a policy.

what is a warranty?

descriptive literature sales aids slide shows prepared group talks brochures sales illustrations policy illustrations

what is considered false advertising?

MIB assists in underwriting life and health cases. it is the CIA of the industry.

what is the medical information bureau?

legal part of the contract.

when attached to the policy the application becomes what?

at time of application. blood, marriage, business.

when must insurable interest exist?

paramedic, registered nurse, or physician.

who can complete a medical exam?

obtaining a statement of the insured's good health

if inital premium has not been paid at time of application, agent must obtain a signed statement attesting to his or her good health.

backdate a policy

making policy effective at an earlier date than present, in order to save age. 6 months limit. all back due premium must be paid.

MIB rule 2?

applicants must be advised that if they apply to another insurer for coverage or if a claim is submitted to such insurer, MIB will supply any requested information in its files to insurer.

FCRA rule 2

applicants must be provided with the names of all the people contacted during the previous 6 months for purpose of report.

nonmedical limit

applications for policies below a certain face amount (50,000 or 100,000) will not require additional medical information other than what is provided in application.

substandard risk

risk that is below the standard risk guidelines of company. can be rated or rejected. poor health, dangerous occupation or hobby.

the date the receipt was given will be noted as the policy effective date in the contract.

if a receipt (conditional or binding) was issued in exchange for an intial premium payment?

FCRA rule 3

if based on report, insurer rejects application, insurer must provide name and address of the reporting agency.

FCRA rule 5

if consumer disagrees with info on file, he/she may file a statement giving their opinion.

policy does not become valid until initial premium is collected. requires consideration, premium plus application.

if a premium deposit is not paid with the application?

special questionnaires

aviation hobbies foreign residence fiances military service occupation

application

basic source of insurability information. agents responsibility to make sure answers by applicant are recorded fully and accurately.

coverage is guaranteed, even if the proposed insured is found uninsurable, until insurer formally rejects application. only used with most experienced agents.

binding receipt

binding receipt does what?

binds 100,00 under receipt client is only covered for 60 days, if medical exam is required but death accidentally occurs within 30 days death benefit is paid. one month's premium must be paid in advance. no material misrepresentations and death must not be suicide.

applicant can have agent correct the info, but the applicant must inital the correction.

changes in application

standard risk substandard risk preferred risk

classification of applicants?

constructive delivery

company releases policy to agent even if you never actually deliver it it has been "constructively delivered".

certain conditions must be met in order for insurance coverage to go into effect.

conditional receipt

insurability receipt (conditional)

coverage is effective either on date application was signed or date of medical exam if one was required.

approval receipt (conditional)

coverage is effective when company approves application. (rarely used)

part 2 medical

focus on health and family history. this may or may not be all that's required. medical exam may be ordered

buyers guide

generic publication written in easy language to understand. does not address the specific policy being considered.

3, general medical and agent's report.

how many parts are in a life insurance application?

application medical report MIB attending physician statement special questionnaires inspection or investigative reports credit reports

most common sources for an underwriter are?

Part 1 General

name of insured, type of policy, face amount, name and relationship of beneficiary, other insurance insured owns, other applications pending, other info sought hazardous. (hobbies, travel, smoker or not)

standard risk

no special restrictions or additional rating

inspection or investigative reports

obtained by insurers on applicants who apply for large amounts of life insurance.

credit reports

obtained from retail merchants or other sources are a valuable tool in seeing if insured has questionable credit ratings. poor credit can make insurer loose money and they are likely to lapse their policy's fast. good credit is a must due to "acquisition costs".

if initial premium was paid, effective on date of receipt.

policy effective date?

person

policy is sent to agent for delivery to policy owner and should be delivered in?

underwriting

process of selection, classification and rating of risks.

agent must deliver policy this helps to?

reinforce sale lead to future sales prevents misunderstandings and policy returns prevent potential lapse

FCRA rule 4

reporting agency, not insurer, must disclose all info (except medical) contained in report.

fair credit reporting act of 1970

requires fair and accurate reporting of information about consumers, including applications for insurance. seeks to insure fairness with regard to confidentiality, accuracy and disclosure.

proper solicitation

solicit good business, cases that fit within insurers guidelines and represent profitable business. observe the highest professional standards.sales presentation must not be deceptive. (not providing complete disclosure to prospect)

representation

statements an applicant represents as being substantially true to the best of the applicant's knowledge and belief, but are not warranted to be exact in every detail.

representations not warranties

statements made on application are considered to be?

only the applicant and whoever gets written permission from applicant

who can make changes in the application?