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.