Accidental Injury
a major cause of loss (peril), an unforseen and unintended injury that resulted from an accident rather than a sickness
Sickness
a major cause of loss (peril), normally defined as an illness, which first manifests itself while the policy is in force. Ninety percent of health insurance claims result from sickness rather than accidental injury.
Principal Types of Losses and Benefits
Loss of income from disability, medical expense, dental expense, long term care expense, vision (some employers provide this form of group health coverage to their employees to provide eye examinations and eyeglasses on a limited basis), prescription (pre
Classes of Health Insurance Policies
individual vs. group, private vs. governement, limited vs. comprehensive (limited health insurance policies only cover specific accidents/diseases while comprehensive covers all sickness or accidents that are not specifically excluded)
Types of Limited Policies
accident only, travel accidnet, hospital indemnity, credit disability, prescription drugs, vision care, blanket insurance, dental expense
Hospital Indemnity
a policy that provides a specific amount on a daily, weekly, or monthly basis while the insured is confined to a hospital. Payment under this type of policy is unrelated to the medical expense incurred, but based only on the number of days confined in a h
Blanket Insurance
a policy that covers members of a particular group when they are participating in a particular activity. Such groups include students, campers, passengers on a common carrier, or sports teams. Often the covered individual's name is not known because indiv
Common Exclusions from Coverage
war or act of war, intentionally self-inflicted injuries, pre-exisiting conditions, elective cosmetic surgery, conditions covered by workers compensation, government plans, participation in criminal activity
Marketing Requirements - Advertising
the purpose of rules and regulations regarding advertisements is to ensure truthful and adequate disclosure of relevant information to the consumer, and to preventunfair competition among insurers
Prohibited Advertising of Life and Health Insurance Guaranty Association
it is an unfair trade practice to make any statement that an insurer's policies are guaranteed by the existence of the insurance guaranty association
Marketing Requirement - Sales Presentations
must be accurate and complete, outline of coverage and other other forms
Field Underwriting
a producer's function as the field underwriter is to gather creditable information from an applicant that would assist the producer in screening marginal or unacceptable risks before taking an application for an insurance policy. Underwiting is the first
Disclosure of Information about Individuals
an insurance company or an agent cannot disclose any personal or privileged information about an individual unless any of the following occur: a written authorization by the individual dated and signed witihin the past 12 months has been provided; the inf
Application
begins with a form provided by the company and completed by the agent, as questions are asked of the applicant, and the apllicant's responses are recorded. This form is then submitted to the insurance company for its approval or rejection. The application
Changes in the application
because the application is so important, most companies require that it be filled out in ink. The agent might make a mistake when filling out the app or the applicant might answer a question incorrectly and want to change it. To do so one must either star
Policy review
when an agent delivers teh policy he/she should review the insured's original goals and needs
Statement of Good Health
in many cases, the initial premium is not paid until the policy is delivered. Most insurance companies require that when the agent collects the premium, he/she must also obtain a statement signed by the insured testifying to his/her continued good health
Common Situations for Errors/Omissions
at any time during the sales process there can be a misunderstanding or misrepresentaion that could lead to legal action being taken by the insured. Agents should document everything: interviews, phone conversations, requests for information, etc.
Underwriting Criteria
the underwriter's function is to select risks, which are acceptable to the insurance company
Sources of Underwriting Information - Application
an accurate and thorough application is imperative to the insurance company
SUI - Reports - Agent
only the agent/producer is involved in completing the agent's report. It asks questions about the length of time the applicant has been known to the agent, an estimate of the applicant's income and net worth and whether the agent knows any reason that the
SUI - Reports - Attending Physician
if deemed necessary by the underwriter, an attending physician's statement will be sent to the applicant's doctor to be completed. This source of information is best for accurate information on the applicant's medical history. The physician can explain ex
SUI - Reports - Investigative Consumer
includes information on an applicant's character, general reputation, personal habits, and mode of living that is obtained through investigation. (interviews with friends, associates, etc.)
SUI - Reports - Medical Information Bureau
reports on previous insurance information can be obtained from the Medical Information Bureau. Members of the MIB can request a report on an applicant and receive coded information from any other applications for insurance submitted to other MIB members.
SUI - Reports - Medical Examinations and Lab Tests
medical examinations, when required by the insurance company, are conducted by physicians or paramedics at the insurance company's expense
Unfair Discrimination
underwriting is a process of discrimination; however, the underwriter cannot discriminate between individuals of the same class in the amount of premiums or rates charged for any insurance policy or in the policy benefits and conditions
Classification of Risks
once the underwriters have collected and reviewed all the necessary information on the applicant, they will make a decision to either accept or decline the applicant for insurance. The applicants that have been accepted will fall into one of the 3 categor
Preferred
risks that reflect a reduced risk of loss and are covered at a reduced rate
Standard
risks that reflect average exposures and may be insured at standard rates and premiums
Substandard
risks that reflect an increased risk of loss. These applicants may be able to obtain health insurance coverage but at an increased premium
Declined risks
If the underwriter feels that the applicant is too high a risk, the applicant may be declined
Discrimination against victims of domestic violence
no person shall consider the status of a victim of domestic violence as a criterion in any decision with regard to insurance underwriting, pricing, renewal, scoper of coverage, or payment of claims