NJ Life and Health Insurance Test Correct answers latest update

NJ Life and Health Insurance Test Correct answers latest update Agency Contract A contract given that is held between an insurer and an agent/producer, containing the expressed authority given to the agent/producer, and the duties and responsibilities to the principal. An agent who is in violation of the agency contract may be held personally liable to the insurer. Agent/Producer A person who acts for another person or entity with regard to contractual arrangements with third parties; a legal representative of an insurance company. The classification of producer usually includes agents and brokers; agents are the agents of the insurer. Insurer is the principal. Insurer party who provides against losses. provides benefits or other services Applicant (proposed insured) A person who requests or seeks insurance from an insurer. Beneficiary The person who receives the benefits from the policy of insurance. Death Benefit (Face amount/face value/ coverage) The amount paid when a claim is issued against a policy of insurance. Insurance Policy A contract between a policy owner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events. Insured the person covered by the policy of insurance who may or may not be the applicant or policy owner. Insurer ( principal ) the company who issues a policy of insurance. Life Insurance A coverage upon a person's life, and granting, purchasing or disposing of annuitirs Policyowner The person who is entitled to exercise the rights and privileges in the policy and who may or may not be the insured. Premium The money paid to the insurance company for the policy of insurance. Solicitation of Insurance An attempt to persuade a person to buy an insurance poolicy 4 steps to completing application, underwriting, and delivering 1. Solicitation and Slaes Presentations 2. Underwriting: Field and Company 3. Premium Determination 4. Policy Issue and Delivery Disclosure statement Will help the applicants to make more informed and educated decisions about their choice of insurance. Buyer's Guide Provides basic, generic information about life insurance policies that contains, and is limited to, language approved by the Department of Insurance. Explains how a buyer should go about choosing the amount and type of insurance to buy, and how a buyer can save money by comparing the cots of similar policies. Insurers must provide a buyer's guide to all prospective policy applicants prior to accepting their initial premium. Policy Summary A written statement describing the features and elements of the policy being issued. Must include name and address of the agent, full name and home office or administrative office address of the insurer, ad the generic name of the basic policy and each rider Must be provided when the policy is delivered. Illustrations Means a presentation or depiction that includes nonguaranteed elements of a policy of individual or group life insurance over a period of years. An agent may only use the illustrations of the insurer that have been approved, and may not change them in any way. What must a life insurance illustration do? 1. Distinguish between guaranteed and projected amounts 2. Clearly state that an illustration is not a part of the contract 3.Identify those values that are not guaranteed as such. Field Underwriting The agent has many important responsibilities during the underwriting process and beyond, including the following: Proper solicitation of applicants; Helping prevent adverse selection; Completing the application; Obtaining the required signatures; Collecting the initial premium and issuing the receipt, if applicable; and Delivering the policy. The Application The starting point and basic source of information used by the company in the risk selection process. Application Part I General Information Includes the general questions about the applicant, such as name,age, birth date, gender, income, marital status, and occupation. Identifies the type of policy applied for and the amount of coverage, and usually contains information concerning the beneficiary. Application Part II-Medical Iformation Medical Information Includes information on the prospective insured's medical background, present health, any medical visits in recent years,medical status of living relatives... For relatively small amounts of insurance--non medical application For larger amounts--the insurer will usually require some sort of medical examination by a professional. Agent's Report Provides the agent's personal observations concerning concerning the proposed insured. The agent's report does not become a pat of the entire contract, although it is a part of the application process. Who must the application The agent and the proposed insured (usually the applicant). Application signatures If proposed insured and policy owner are not same person, such as in a business purchasing insurance on a an employee, then the policy owner must also sign the application. Changes on the Application An agent should never erase or white out an application. Applicant should complete new one or initial the change.