Unit 17: Policy Underwriting, Insurance, and Delivery

Delivering the Policy

Allows the producer to explain the policy, enhance the producer-client relationship, and gain potential future business.

Replacement

The no loss/no gain requires that when health insurance is replaced, ongoing claims under the former policy must continue to be paid under the new policy, thereby overriding any pre-existing conditions exclusion.

Servicing the Policy

Good customer service makes insureds feel more comfortable doing business with you and makes them more likely to renew with your agency.

Professionalism and Ethics

Ethics and professionalism are critical components of a successful career as an insurance producer. Ethics means setting a standard of conduct or behavior based on established values. A professional is defined as a person in an occupation requiring an advanced level of training, knowledge, or skill. The highest standard of service is provided by preparing for new clients long before even meeting them. Fiduciary Responsibility: A fiduciary is a person in a position of financial trust. As a fiduciary, producers have an obligation to act in the best interest of the insured. Summary of the Producer's Responsibilities: The insurance producer is a key person in the process of marketing, underwriting, and delivering insurance policies.

Premium Payments

Definition of Premium: The premium is the consideration paid for the benefits provided by the policy. Earned and Unearned Premium: Insurance premiums are paid in advance. Payment Modes: Mode of premium payment refers to the frequency with which premiums are paid. Payments may be made in five ways: Annually, Semiannually, Quarterly, Monthly, or Weekly. Insurers generally calculate premiums on an annual basis. Initial Premium: The first premium the applicant pays to place the policy into effect. A health insurance policy goes into force when: 1.) the initial premium has been paid; and 2.) the policy is delivered to the insured. The important thing to remember is that coverage never applies until the insured has paid for it. If the initial premium does not accompany the application, the premium must be collected at policy deliver along with a signed statement that the insured continues to be in good health. The policy is then effective as of the date stated in the policy. Policy Effective Date: The best approach is to state that the policy takes effect on the date specified in the policy as the effective date. Policy Term: Once a health insurance policy becomes effective, it will stay in force for the period for which the premium has been paid, unless the insurer or the insured cancels it. Policy Fee: Generally a flat amount that helps defray such expenses as acquisition costs, producer commissions, administration, and maintenance of the policy. Usually, the policy fee is added to the premium and paid annually.