chapter 19: underwriting

Question 1

premium formula

Answer 1

morbidity - interest + expenses

Question 2

premium receipts

Answer 2

given when the initial premium is provided with the application

Question 3

trial application

Answer 3

an application that’s submitted without an initial premium

Question 4

conditional receipts

Answer 4

provides coverage as of the date of the application/date of the required medical exam as long as the company deems the applicant to be a standard/preferred risk

Question 5

binding receipts

Answer 5

more common for auto/homeowners insurance than for life/health insurance

coverage is guaranteed until the insurer formally rejects the application

Question 6

temporary insurance agreements

Answer 6

sometimes used interchangeably with binding receipts

provides a limited amount of additional protection through the underwriting period

Question 7

inspection receipt

Answer 7

when a proposed insured wants to review a policy before purchasing it, they pay the first premium after examining it

Question 8

outline of coverage

Answer 8

agent is required to deliver a summary of the applicant’s coverage

Question 9

shopper/buyer’s guide

Answer 9

generic publication that explains health insurance for a normal consumer

given before the agent accepts the initial premium

Question 10

statement of good health

Answer 10

must be obtained when initial premium is not paid with the application

Question 11

delivery receipt

Answer 11

insured is required to sign upon receiving the contract and designates the start of the free-look period

Question 12

policy effective date vs policy issue date

Answer 12

policy issue date is just when the policy was issued, not when coverage begins

coverage either begins on receipt’s date or when the first premium and the statement of continued good health is collected

Question 13

medical information bureau

Answer 13

formed by insurance companies that has information on previous applications of insurance that is used in the underwriting process