Life Insurance Underwriting-6 Flashcards Preview

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Flashcards in Life Insurance Underwriting-6 Deck (18)
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1
Q

Purpose of underwriting

A

Used by an insurance company to determine whether or not an applicant is insurable and if so how much to charge for premiums

2
Q

7 Most common sources of underwriting info include

A
The application 
The medical report 
Attending physicians statement 
The medical information bureau 
Special questionnaires 
Inspection reports 
Credit reports
3
Q

Credit reports

A

Applicants credit history

4
Q

Warranty

A

Statements that are guaranteed to be literally true

If any info is false can cause void

5
Q

Representation

A

Statements made my applicants that are substantially true to the best of their knowledge

6
Q

Inspection reports

A

Provides info about the applicants character, lifestyle, and financial stability

7
Q

Medical information bureau

A

Nonprofit trade organization which maintains medical info about individuals

8
Q

USA patriot act

A

Enacted in 2001

Requires insurance companies to establish formal anti money laundering programs

9
Q

Fair credit reporting act of 1970 mins

A

Regulates the way credit info is collected and used to protect the rights of consumers for whom an inspection or credit report has been requested

10
Q

Buyers guide

A

Provides general info about the types of life insurance policies available

11
Q

Policy summary

A

Provides specific info about the policy purchased such as premium and benefits

12
Q

Conditional receipt

A

Denotes that coverage will be effective once certain conditions are met

13
Q

Binding receipt

A

Provides coverage from the date of the application regardless of whether the applicant is insurable

14
Q

The effective date is important for two reasons:

A

Identifies when the coverage is effective

Establishes the date by which future annual premiums must be paid

15
Q

Backdating

A

Process of predating the application a certain number of months to achieve a Lower premium

16
Q

Constructive delivery

A

Occurs if the insurance company intentionally relinquishes all control over the policy and turns it over to someone acting for the policyowner

17
Q

The statement of good health

A

Verifies that the insured has not become ill injured or disabled during the policy approval process

18
Q

Personal delivery

A

Is a good practice as it allows the producer to explain the coverage to the insured