Chapter Recap

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This chapter explained the basics of accident and health insurance and underwriting procedures for health insurance policies. Let's recap them.

Types of Losses and Exclusions

Topic	Key Points
Important Terms	Accidental bodily injury — unintended injury resulting from an accident. Sickness — illness which manifests while a policy is in force. Coinsurance — sharing of expenses between insured and insurer (percentage). Copayment — sharing of expenses between insured and insurer (dollar amount). Deductible — dollar amount an insured must pay before benefits begin. Gatekeeper — primary care physician who refers insured to specialist. Managed care — a program designed to contain health care costs. Extension of benefits — continuation of coverage after discontinuance of original coverage to an employee or dependent. Waiting period — amount of time before benefits may be received. Master policy — issued to policyowner (usually the employer) in group insurance.
Types of Limited Policies	Accident — coverage for disability, medical care, death, or dismemberment resulting from an accident. Dread disease policy — variety of benefits for a specific disease, such as a cancer policy or heart disease policy. Critical illness — pays a lump sum to the insured upon diagnosis and survival of a critical illness. Hospital indemnity — provides a specific amount on a daily, weekly, or monthly basis while the insured is confined to a hospital. Credit disability — covers payments on loans if the insured becomes disabled.

Topic

Key Points

Important Terms

Accidental bodily injury — unintended injury resulting from an accident. Sickness — illness which manifests while a policy is in force. Coinsurance — sharing of expenses between insured and insurer (percentage). Copayment — sharing of expenses between insured and insurer (dollar amount). Deductible — dollar amount an insured must pay before benefits begin. Gatekeeper — primary care physician who refers insured to specialist. Managed care — a program designed to contain health care costs. Extension of benefits — continuation of coverage after discontinuance of original coverage to an employee or dependent. Waiting period — amount of time before benefits may be received. Master policy — issued to policyowner (usually the employer) in group insurance.

Types of Limited Policies

Accident — coverage for disability, medical care, death, or dismemberment resulting from an accident. Dread disease policy — variety of benefits for a specific disease, such as a cancer policy or heart disease policy. Critical illness — pays a lump sum to the insured upon diagnosis and survival of a critical illness. Hospital indemnity — provides a specific amount on a daily, weekly, or monthly basis while the insured is confined to a hospital. Credit disability — covers payments on loans if the insured becomes disabled.

Underwriting

Topic	Key Points
Steps in the Underwriting Process	Field underwriting — by agent. Company underwriting. Premium determination. Policy delivery.
Sources of Insurability Information	Application — must be completed and signed. Producer's/agent's report — agent's observations about the applicant that can assist in underwriting. Attending Physician Report — best for accurate information on the applicant's medical history. Investigative consumer report — includes information on an applicant's character, general reputation, personal habits, and mode of living that is obtained through investigation. MIB report — helps companies share adverse medical information on insureds.

Topic

Key Points

Steps in the Underwriting Process

Field underwriting — by agent. Company underwriting. Premium determination. Policy delivery.

Sources of Insurability Information

Application — must be completed and signed. Producer's/agent's report — agent's observations about the applicant that can assist in underwriting. Attending Physician Report — best for accurate information on the applicant's medical history. Investigative consumer report — includes information on an applicant's character, general reputation, personal habits, and mode of living that is obtained through investigation. MIB report — helps companies share adverse medical information on insureds.

Right of Renewability

Type	Key Points
Noncancellable	Insurer cannot cancel or raise premiums beyond the amount stated in the policy.
Cancellable	Insurer may cancel the policy at any time, or at the end of the policy period, with proper written notice and a refund of any unearned premium paid.
Guaranteed Renewable	Insurer may increase the policy premium (on a class basis only) on the policy anniversary date; insured has the unilateral right to renew the policy for the life of the contract.