Flashcards in Chapter 13 Deck (54)
What is claims administration?
the process of evaluating each claim submitted, deciding whther or not the claim is eligigl,e informing the individual who submitted the claim of the deicsion and authorizing the payment of each eligible claim according to the term of the policy.
Which area of the company is usually reasponsible for evaluating and paying life insurance claims?
claims department, or claims administrative department.
What is an underwriters role in the claims evaluation process for contestible claims?
to review the original file information and compare it to newly developed information, looking for any potential matrial misrepresentation or fraud.
What is the purpose of the legal department in the claims evaluation process for contestible claims?
legal advise, if claim is denied, and denial is later disputed, their hob is to represent the compnay or supervise outside attorneys in any litigations, arbutrations, or settlement invoving the company.
- aids in development of policy forms, agency conttacts, business contracts, and any other legal documentations.
What is the misstatement of age/gender provision?
a contractural provision found in most life insurance policies.
-these factors are sig in premium amounts. This statement describes what actions will be taken to adjust the amount of the policy benefit when age/sex was incorrectly stated.
what is an incontestability provision?
describes the time limit within an insurer has the right to void the contract on the grounds of material misrepresentation in the application.
What is the stated period under which the insurer has the right to avoid the contract and deny the claim?
contestable period, and is usually 2 yrs.
What is the suicide exlusion?
1. usually part of the basic policy (not a rider_
- purpose to protect company angainst anti-selection when a proposed insured applied for the policy with suicide in mind.
- 2 yrs
- if a policy lapses, and is reinstated, the period is usually still original policy issue date. Canada will restart the epioer.d.
Does the insurance company return the premiums paid when a suicide occurs during the contestability period?
yes, because its conisdered to be an affirmation of the validity of the contract by applying the limited-benefit-for death-by-suicide provision.
An application cannot be altered once it has been signed. Should an application contain information that needs to be modified, completed, or clarified, most insurers will use an amendment. Define this
a modification to the terms of a contract, it follows the laws to modify a contract in the state where the contract will be enforced. IT is a written document signed by one of both partities involved in the agreement.
What is a change in health statement
required when a proposed insured needs to notify the insrer in writing if his health or any material information in the app changes before the policy is delivered.
IF the insured does not notify the insuere of the material change prior to the policy being issued, there could be a deny in the claim. To do so the insuere would have to show 3 things. What are they
1. change in health directly affected the degree of rick for the case
2. the proposed insurered knew of the change in health
3. the changes in health statements was unambiguous
What is Waiver
The act of intentionally or knowingly reliunquishing or abandoning a known right, claim or privilege, either expressed or implied.
- if an insuere fails to act upon information it had whne the case was u/w the they surrender the right/privilege to contest on that basis.
There are several types of waivers in relation to insurance contracts. Name them.
1. Express waivers- oral or written, they are clear statements that a right is being given up.
2. implied waivers- created thorugh conduct of the waiving party and indivates that a right will not be enforced
3. waiver by silence- created when there is a duty to speak.
What is estoppel?
an equity principale applied to life insruacen contract law. if by your actions, words or silence, another person has relied on or taken action that he would not have otherwise takem to his detriment, your defence is waived and you are prohibited (estopped) from later defending, denying, or rescinding your orignal course of action.
What is the difference between waiver and estoppel?
waiver is the action, estoppel is the legal doctrine that disallows the company from pursuing a denial based on the previous action.
What is the notification of death process?
begins with the insrer being notified of the loss, the claiment is the person who submits a life insurance policy claim to the insuracne company. The claimant can be the beneficiary, owner, or person acting on behalf.
They will out the claimantt's statement.
the claim is assigned to a claim analyst/adjuster. The claims reviewes the claim,
To determine coverage the claims analysis will take 4 steps. Name them
1. determine date coverage was issued
2. varify the coverage was in force whne the loss occured by checking the admin sxstehm to verify all payments.
3. are premiums paid up to date, and check grace perios, lapses status, reinstatement status
4. determine if the policy is contestable.
What is the Waiver of premium (WP) rider
if the insured becomes totally disabled, the insuere will give up, or waive the right to collect premiums that become due while the insured is totally disabled.
- waiting period typically exist
What is the Accidental death benefit (ADB)
supplemental rider which provides a death benefit in addition to basic death beenfit should the insured die as a results of an accident.
there are limitations
What accelerated death benefit?
can be a seperate rider, or with some insurers is part of the basic policy.
-certain terms need to be met.
- policy proceeds are paid to the policy owner-insured and are later deducted from the basic policy death benefit.
Who is typically the payee on a benefit?
the names beneficiary. typically: spouse, child, estate, trust, charity or other entity deemed to have an insurable interest in the life of the insured at the time of issue.
What is a natural beneficiary?
a person such as spouse or children.
What is a non-natural beneficiary?
trust, company, or estate.
What is a contingent beneficiary?
the second beneficiary to receive the benefit should the beneficiary predecease the insured.
What happens if the beneficiary is disqualified by law from receiving the proceeds?
The insurer would usually pay the contingent beneficiary.
- usually happens when the beneficiary brought on the death of the insured.
What happens if the beneficiary cannot be located?
the insurer will follow the laws of the state or province where the beneficiary last resided.
- they will tehn deposit the proceeds wihtin the state to be held in trust
beneficiary will then have to petition the state for the proceeds.
- the state will hold the money in trust for a specific number of years, then the proceeds escheat to the state.
What is the act of interpleader?
when a beneficiary cannot be determined, the insurance company can give the funds to the court for them to handle.
What are typically acceptable forms of proff of death?
death certificate, original or copy.
- most canadian insurers will aslo accept coroner's or hospital certificate of death as proff.