Primerica: Chapter 1

Field underwriter

the company's frontline

Material misrepresentation

A statement that, if discover, would alter the underwriting decision of the insurance company

Changes to the application

An agent should never erase a white out an application for insurance. Need to make changes with applicants initials

Solicitation of Insurance

An attempt to persuade a person to buy an insurance policy, and it can be done orally or in writing

Substandard (High Exposure) risk

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

Investigative consumer reports

Are similar to Consumer Reports in that they also provide information on the customers character, reputation, and habits

Required signatures

Both the agent in the proposed insured (usually the applicant) must sign the application

Fair credit reporting act

Establish procedures that consumer reporting agency's must follow in order to ensure that records are confidential, accurate, relevant, and properly used. The low also protects consumers against the circulation of in accurate or obsolete information

General information

Includes the general questions about the applicant, such as name, age, address, birthdate, gender, income, marital status, and occupation

Insurance

Is a contract in which one party agrees to idemnify the insured party against lost, damage or liability arising from an unknown event.

Warranty (made by company)

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

Representations (made by applicant)

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

Underwriting

The risk selection and classification process

Insurable interest

To purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of loss.

Medical information bureau (MIB)

A membership corporation owned by member insurance companies

Standard risks

I persons who, according to companies underwriting standards, are entitled to insurance protection without extra rating or special restrictions

Replacement

I practice of terminating an existing policy or letting it lapse, and obtaining a new one.

Consumer reports

Include written and/or oral information regarding a consumers credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources - information from public records

Medical information

Includes information on the prospective insureds medical background, present health, any medical videos in recent years, medical status of living relatives, and cause of death of disease relatives.

Stranger-originated life insurance (STOLI)

Is a life insurance arrangement in which a person with no relationship to the insured purchases a life policy on the insurance life with the intent of selling the policy to an investor and profiting financially when the insured dies.

Policy summary (specific)

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

The application

Is the starting point and basic source of information used by the company in the risk selection process

Intentional

Material misrepresentations that are considered fraud

Prospective insured

Maybe rated as one of the three classifications: standard, substandard, or preferred

Four ways to pay premium

Monthly > quarterly > semiannual > annual

Buyers guide

Provides basic, generic information about life insurance policy's that contains, and is limited to, language approved by the department of insurance

Agents report

Provides the agents personal observations concerning the proposed insured

Nonprofit trade organization

Receives adverse medical information from insurance companies and maintains confidential medical impairment information on individuals

Conditional receipt

Says that coverage will be effective either on the date of the application or the date of the medical exam, which ever occurs last, unless coverage is declined or rated, or issued with riders excluding specific coverage

Factors in premium determination

There are three primary factors that are used in premium determination: mortality, interest in expense

Preferred risks

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

Misrepresentations (the agents)

Untrue statements on the application

Premium receipt

Whenever the agent collects premiums, the agent must issue at premium receipt. The type of receipt is she will determine when coverage will be effective.