Underwriting Basics, Policy Issuance and Delivery
Welcome to the Underwriting Basics, Policy Issuance and Delivery Review section. In this module, we are going to do a quick review of the key concepts and key terms from the chapter.
Underwriting
Underwriting is the process that insurers use to select, classify and rate risks, so that they accurately reflect the amount of risk undertaken.
Factors that impact the selection, classification and rating of life and health risks include the individual’s age, gender, build, lifestyle, smoking status, hobbies, hazardous occupations, medical history, and family health history. Insurers cannot base underwriting on national origin, race or sexual orientation.
Field Underwriting Field Underwriting is performed by the producer, face-to-face with the applicant. As field underwriters, producers help reduce the chance of adverse selection, assure that the application is filled out completely and correctly, collect the initial premium and deliver the policy.
Key Terms
Below are a few key terms in underwriting. * Applicant is defined as the person applying for the policy who fills out the application to be submitted. * Policyowner is the person who has all the ownership rights under the policy, pays the premiums, and accepts the policy when delivered. * Insured is the person who is covered under the policy. * Beneficiary is the named person(s) who receive the policy benefits.
Information Sources
We will cover information sources in more detail in other chapters. The most important source is the application. Another important source is the Medical Information Bureau (MIB). Other sources may include: agent report, attending physician statements, investigative consumer report. * Application: The application is one of the primary sources of information used in underwriting an insurance policy. The