Term
| What is the job of the underwriter? |
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Definition
| Assess risk, approving or decliing applications, determining premiums and protecting against adverse selection. |
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Term
| What is the primary tool of the underwriter? |
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Definition
| The application is the primary tool. |
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Term
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Definition
| A proposed insured in good health who is assessed standard (ie., normal) premium rates |
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Term
| What is a Substandard Risk? |
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Definition
| A proposed insured who has health problems. Some may be declined. Others who obtain coverage may be "rated up" and charged a higher premium. |
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Term
| What is a Preferred Risk? |
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Definition
| Proposed insured in excellent health recieves a lower premium rate. These types of risks die prematurely less often than standard or substandard risks. |
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Term
| What is Step-Up-In-Age or Rate-Up-In-Age? |
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Definition
| The proposed insured is 45 years of age but because of substandard classification is rated as a 50 year old. |
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Term
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Definition
| The proposed insured's rate per thousand is increased from $12 per $1,000 of coverage to $15 per $1,000 of coverage. |
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Term
| What is a Percentage of the Normal Rate? |
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Definition
| The proposed insured's rate is multipled by 150% or 200% (ie., a stunt pilot) because of the substandard or higher risk classification. |
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