A: Insurable Interest

Rating Classifications

Preferred Standard Substandard Declined

Buyer's Guide

Provides general information about the types of life insurance policies available.

Policy Summary

Provides specific information about the policy being issued.

Illustration

A presentation or depiction that includes non guaranteed elements of a policy of individual or group life insurance over a period of years.

Business uses of Life Insurance

Buy-sell Funding Key Person Executive Bonus

What are the personal uses of Life Insurance

Survivor Protection Estate Creation and Conservation Cash Accumulation Liquidity

Factors in premium determination

Mortality Interest Expense

Elements of the Underwriting Process

1. Information Sources and Regulation 2. Selection Criteria 3. Classification of Risk

A valid insurable interest when the policy is insuring any of the following:

1. Policyowner's own life 2. The life of a family member (close blood relative) 3. The life of a business partner, key employee, or someone with financial obligation to the policyowner.

Responsibilities of a policy-producer in process of issuing a life insurance policy

1. Solicitation and Sales Presentations 2. Field Underwriting

Information Sources include:

Application Producer Report Attending Physician Statement Investigative Consumer (Inspection) Medical Information Bureau Report Medical Examinations and Lab Test

Insurance proceeds pain in a lump-sum may be needed for any of the following expenses:

Cost Associated with Death (postmortem) Debt Cancellation Emergency Reserve Funds Education Funds Retirement Fund Bequest

Field Underwriters responsiblities

Helping prevent adverse selection Proper solicitation of applicants Completing the application Obtaining required signatures Collecting the initial premium (issue receipt) Delivering the policy

What are the methods/approaches for determining amount of personal life insurance?

Human Live Value Approach (HLVA) Needs Approach

___________ must exist between the policyowner and the insured at the time of application.

Insurable Interest

Reasons for declination

No insurable interest Applicant is medically unacceptable Potential for loss is so great Insurance is prohibited by public policy or is illegal

Premium payment mode

Refers to the frequency the policy owner pays the premium. Premiums can be paid annually, semi-annually, quarterly, or monthly.