Chapter 1 Terms Flashcards
Chapter 1 Underwriting (13 cards)
What is adverse selection?
Adverse selection refers to insuring of risks that are more prone to losses than the average risk.
Who is an agent/producer in insurance?
An agent/producer is a legal representative of an insurance company, including agents and brokers.
What is an applicant or proposed insured?
An applicant or proposed insured is a person applying for insurance.
Who is a beneficiary?
A beneficiary is a person who receives the benefits of an insurance policy.
What is a death benefit?
A death benefit is the amount paid upon the death of the insured in a life insurance policy.
What constitutes fraud in insurance?
Fraud is intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
What is an insurance policy?
An insurance policy is 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.
Who is the insured?
The insured is the person covered by the insurance policy; they may or may not be the policyowner.
What is an insurer (principal)?
The insurer (principal) is the company that issues an insurance policy.
What does lapse mean in insurance?
Lapse refers to policy termination due to nonpayment of premium.
What is life insurance?
Life insurance is coverage on human lives.
Who is the policyowner?
The policyowner is the person entitled to exercise the rights and privileges in the policy.
What is a premium?
A premium is the money paid to the insurance company for the insurance policy.
