Underwriting and Settlement Process Quiz

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Questions and Answers

What are the sources of underwriting information?

Reports and data from industry statistics

Only insurance applications

Only insurance company files

Insurance applications, reports, insurance maps, site inspections, insurance company files, and industry statistics reports and data (correct)

What information is required in a life insurance application?

Medical information only

Only general information such as name, birth date, and address

General information and medical information (correct)

Only preference for riders or optional features

What is a possible consequence of unfavourable claims experience?

The insurance company will lower the premium

The insurance company will deny future claims

The insurance company will raise the premium (correct)

The insurance company will cancel the policy

What is the settlement process?

The process of verifying the claim with the terms of the policy to ensure its authenticity Signup and view all the answers

What is the role of agents in underwriting?

Agents may use their underwriting authority in some non-life insurance policies Signup and view all the answers

What is required to settle a claim?

Necessary documents such as the policy document, death certificate, FIR, etc. Signup and view all the answers

Is the settlement process different for different types of insurance?

Yes, the settlement process is different for life, health, and vehicle coverage Signup and view all the answers

What are some of the resources utilized in the underwriting process?

Reports, insurance maps, site inspections, industry statistics reports and data Signup and view all the answers

What information is required in a life insurance application?

Medical information, agent's statement, and signatures Signup and view all the answers

What is a source of underwriting information that may cause an insurance company to raise the premium?

Claim history Signup and view all the answers

What is the settlement process for an insurance claim?

All of the above Signup and view all the answers

What is the role of an agent in underwriting non-life insurance policies?

They use their underwriting authority Signup and view all the answers

What is the purpose of conducting surveys in the underwriting process?

To determine the authenticity of the data on the proposal form Signup and view all the answers

Are the settlement processes for different types of insurance coverage the same?

No, they are different Signup and view all the answers

What is required for an insurance contract to be legally enforceable?

An agreement of offer and acceptance Signup and view all the answers

What is consideration in an insurance contract?

The price requested by each party in exchange for upholding the contract Signup and view all the answers

What is the purpose of endorsements and riders in insurance contracts?

To supplement coverage Signup and view all the answers

What is the difference between endorsements and riders in insurance contracts?

Endorsements supplement, delete, or change terms of the original contract, while riders modify or alter the original policy Signup and view all the answers

What can riders and endorsements cover in an insurance policy?

Expensive items like antiques, jewelry, gadgets, and collectibles Signup and view all the answers

Can riders and endorsements be added or removed during an insurance policy?

Yes Signup and view all the answers

How long do endorsements and riders remain valid in an insurance policy?

As long as the insurance policy is in force Signup and view all the answers

Study Notes

Sources of Underwriting Information and Settlement Process

Underwriting process utilizes various resources such as application, reports, insurance maps, site inspections, insurance company files, and industry statistics reports and data.
Insurance applications are significant underwriting tools that provide essential information required to evaluate whether to issue a policy and at what premium and terms.
Life insurance applications require general information such as the insured's and owner's name, birth date, address, social security number, and gender, as well as medical information, agent's statement, preference for riders or optional features, and signatures.
Medical information includes questions related to tobacco or nicotine consumption, previous diagnosis, treatment, or hospitalization for various illnesses.
The application also asks whether existing or pending insurance will be changed or replaced by the proposed insurance.
Agents may use their underwriting authority in some non-life insurance policies, and in commercial insurance, contracts for profit sharing are also made.
Claim history is another source of information, and if a client's claims experience has been unfavourable, the insurance company may raise the premium.
The company's experts and consultants conduct surveys to determine the authenticity of the data on the proposal form.
The settlement process involves intimating or notifying the insurance company as soon as a loss occurs or a claim is required, and submitting necessary documents such as the policy document, death certificate, FIR, etc.
After receiving the required documentation, the insurance company verifies the claim with the terms of the policy to ensure its authenticity.
The claim will be settled once the verification process is complete and the insurer has determined that the claim application is accurate, and the reimbursement amount or insured payment will then be deposited to the account or to the person for whom one is responsible, depending on the type of insurance and policy terms.
The settlement process is similar for life, health, or vehicle coverage, but the time period for claim settlement may differ from company to company.

Requirements and Considerations for Legally Enforceable Insurance Contracts

An insurance contract must be based on an agreement of offer and acceptance.
Both parties must provide consideration, which is the price requested by each party in exchange for upholding the contract.
The insurance contract must have a legal purpose and not be contrary to public policy.
Both parties must be legally competent to enter into the insurance contract.
Endorsements and riders are often included in insurance contracts to supplement coverage.
Endorsements in property and casualty insurance supplement, delete, or change terms of the original contract.
Riders in life and health insurance modify or alter the original policy.
Endorsements and riders are used to cover gaps in the standard insurance policy.
Riders and endorsements can cover expensive items like antiques, jewelry, gadgets, and collectibles.
Riders and endorsements can be added or removed at any time during the insurance policy.
Riders and endorsements provide full coverage and can be used to increase coverage at any time.
Endorsements and riders remain valid as long as the insurance policy is in force.

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Description

Test your knowledge of underwriting information and the settlement process with this informative quiz. Learn about the various sources used in the underwriting process and what types of information are required on insurance applications. Discover the steps involved in the settlement process and what documents are needed to make a claim. Use your understanding to answer questions and assess your expertise in this essential aspect of the insurance industry.