📄️ 2.0 Life Basics Overview
Learning Objectives
📄️ 2.1 Terms
Applicant: An applicant is an individual who submits a request for insurance coverage, either for himself or herself or on behalf of another person. The applicant may also serve as the insured, the policyowner, or both.
📄️ 2.2 Producer Responsibilities
Solicitation
📄️ 2.3 Completing the Application
Completing the Application and Field Underwriting
📄️ 2.4 Individual Underwriting By the Insurer
Underwriting is the process of evaluating, selecting, classifying, and rating an applicant to determine whether the individual qualifies for coverage and, if so, at what premium. It involves assessing insurability, assigning an appropriate risk classification, and establishing the rate to be charged.
📄️ 2.5 Premium Determination for Life Insurance
Assumptions and Calculations
📄️ 2.6 Policy Delivery
When an insurer determines that an applicant qualifies as an acceptable risk, the issued policy is forwarded to the producer for delivery to the policyowner. The producer is responsible for delivering the policy, collecting any outstanding premium (if not paid with the application), and reviewing the contract with the policyowner or insured. This review should include an explanation of policy benefits, ratings, endorsements, exclusions, and riders to ensure full understanding.
📄️ 2.7 Personal Uses of Life Insurance
Life insurance serves a variety of personal and financial planning purposes, including the following:
📄️ 2.8 Determining Amount of Personal Life Insurance
Two primary methods used to determine the appropriate amount of life insurance coverage are the Human Life Value Approach and the Needs Analysis Approach.
📄️ 2.9 Classes of Life Insurance Policies
Group Insurance – A group insurance plan is typically owned by an employer, creditor, or association and provides coverage to eligible employees, debtors, or members under a single master policy. Coverage is issued for the benefit of the insured individual's designated beneficiary, often a spouse or family member. Any changes to coverage provisions must be made at the master policy level by the policyholder (the employer or sponsoring organization).
📄️ Recap of Chapter Two
1. The applicant is the individual who submits the application for insurance, either for himself or herself or on behalf of another person. The applicant may also be the insured, the policyowner, or both. (2.1)