Life Insurance and Underwriting Fundamentals

This flashcard set covers key concepts regarding Universal Life policies, AML red flags, policy effective dates, premium collection procedures, and underwriting regulations for life insurance.

Anti-Money Laundering violation red flag

A suspicious activity indicated when a policyowner cash surrenders a Universal Life insurance policy in its early years.

Life insurance contract effective date (post-application)

The point at which a policy becomes active if the initial premium was not collected during the application; it occurs when the producer delivers the policy and collects the initial premium.

Premium check handling protocol

The required action when a check is mistakenly made out to the agent: the agent must return it to the customer, collect a new check made out to the insurance company, and send that new check to the insurer.

Underwriting examination costs

The expenses associated with any medical or personal examinations required during the underwriting process, which are paid for by the insurer.

Primary source of underwriting information

The original application used by the insurance company to evaluate a risk during the underwriting process.

AIDS and HIV testing requirements

Regulatory standards requiring signed consent from the applicant before testing and prohibiting the exams from being conducted in a discriminatory fashion.

Whole Life premium rate factors

Specific criteria, such as geographical location, taken into consideration by an insurance company when determining the cost of a Whole Life policy.