Chapter 3: Field & Home Office Underwriting & Policy Insurance

Application

The principle source or tool utilized by the underwriting department of an insurer to determine whether or not an applicant for life insurance is eligible for coverage is the application

Change to application

An agent can make no changes to an application, must correct error and applicant must signature

Medical Information Bureau

Clearing house of health information supplied by insurers from information on applications

Risk classifacation

Determines the acceptability of the risk; a. Preferred b. Standard c. Sub-Standard d. Uninsurable If Sub-Standard must indicate reason and provide applicant the option to accept policy at higher premium etc.

Policy delivery

If premium had not previously been paid, agent must complete Statement of Continued Good Health and collect premium prior to delivery. In this case, the delivery date would be the effective date of coverage.

Field underwriting

The initial underwriting, during this process the producer determines which risks are desirable and submits those to the underwriting department for approval.

Premium Receipts

Two types, conditional receipt generally provides coverage "as of a date of the receipt as long as a specific condition is satisfied". Binding receipt is unconditional, coverage becomes effective as soon as the premium is collected by the producer

Required signatures

When a producer completes an application, they must include two required signatures (applicant +the producer); for third party ownership 3 signatures (applicant + proposed insured +producer)

Representations

a true statement made by the applicant in response to section I or II