Completing The Application, Underwriting, And Delivering The Policy
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
