Application, Underwriting & Delivering The Policy Flashcards
What is an insurance policy? 
A contract in which the insurance company agrees to indemnify the insured party against loss damage or liability from an unknown event. Based on the principle of indemnity, and based on the spreading of risk (risk pooling ) and the law of large.
In a life insurance policy, when must insurable interest exist? 
Upon application date 
What are the four elements of an insurance contract? 
- agreement - offer & acceptance
- consideration - premiums and representations on the part of the insured. Payment of claims on the part of the insured.
- competent parties - of legal age sound mental capacity, and not under the influence of drugs or alcohol.
- legal purposes - not against public policy
What does representation mean? 
Statements believed to be true to the best of one’s knowledge, but they are not guaranteed to be true
What does warranty mean? 
Absolutely true statements upon which the Valatie of the insurance policy depend
What does insurance solicitation mean? 
Solicitation of insurance means an attempt to persuade a person to buy an insurance policy, and it can be done orally or in writing 
What information does a buyers guide provide? 
It provides basic generic information about life insurance policies that contains and is limited to language permit approved by the division of insurance. It explains how a buyer should go about using the amount and type of insurance to buy and how a buyer can save money by comparing the cost of similar policies.
What is underwriting? 
Underwriting is the risk selection and classification process. It involves careful analysis of many different factors determine the acceptability of applicants for insurance.
What information is gathered in parts one and two of the application? 
Part one contains general information and part two contains medical information
What is the purpose of an agents report? 
The agents report contains personal observations concerning the proposed insured 
Who is required to sign an application for life insurance? 
Both the agent and the proposed insured must sign the application 
When does an insurance policy go in effect? 
Affective either on the date of application, or the date of medical exam 
How can an insurance company use the information obtained from the MIB?
The MIB can only be used as an aid in helping ensures know what areas of impairment they might need to investigate further 
What is the purpose of the fair credit reporting act? 
To protect consumers against the circulation of inaccurate, or obsolete, personal or financial information 
What is the difference between a consumer report and an investigative consumer report? 
Consumer reports include written or oral information regarding a consumers credit, character, reputation or habits, collected by a reporting agency from employment records, credit report, or other public sources. What is that as investigative consumer reports are very similar to consumer reports, but they also provide information on the consumers character, reputation inhabits the primary difference is that the information is obtained through an investigation and interviews with associates, friends, and neighbors of the consumer 
How does a substandard risk policy differ from a standard risk? 
Standard risks are persons who, according to a company’s underwriting standards are entitled to insurance protection, without extra rating or special restrictions, and our representatives of the majority of people at their age with similar lifestyles. As substandard risk applicants are not acceptable at standard rate because of physical condition, personal or family, history of disease, occupation, or dangerous habits. 
What are three factors that determine the premium for a particular policy? 
Risk (mortality - rate of death within a specific group ),  interest, and expense
When would an insured be required to sign a statement of good health?
Once the initial premium has been paid. Policy does not go into effect till the premium has been collected. It verifies that the insured has not suffered injury or I’ll rss since the application date.
Adverse selection
Insuring of risks that are more prone to losses in the average risk
Agent/producer
A legal representative of an insurance company. The classification of producer usually includes agents and brokers. Agents are the agents of the insurer.
