What You'll Learn in This Chapter
This chapter covers the very first things that happen when someone wants health insurance - from filling out the application to delivering the policy. Think of it as the "how insurance gets started" chapter.
As a producer (that's the fancy word for insurance agent), you're the one guiding this whole process. This chapter teaches you the rules of the road.
Key Terms to Know First
You'll see these words everywhere in this chapter. Learn them now and everything else will make more sense.
Agent / Producer
The person who sells the insurance - that's you! They represent the insurance company.
Applicant / Proposed Insured
The person asking for insurance - your customer filling out the application.
Insurer (Principal)
The insurance company itself - they're the ones taking the risk and paying claims.
Premium
The money paid for the insurance policy - like a subscription fee for coverage.
Policyowner
The person who owns the policy and can make changes to it. May or may not be the insured.
Insurable Interest
You'd lose something valuable if the insured person got sick or hurt. Proven by love, family, or money.
Chapter Parts
Contract Law
The 4 elements that make a contract legal, insurable interest, and what makes health contracts unique
Sources of Insurability Information
Fair Credit Reporting Act, MIB reports, consumer reports, and medical exams
Completing the Application
How to fill out the app correctly and who needs to sign it
Submitting to Underwriting
Premiums with the application, conditional receipts, and when coverage begins
Policy Delivery
How policies are delivered and when the free-look period starts
Explaining the Policy
Agent's duty to explain provisions, riders, exclusions, and any changes
Replacement
When someone switches policies - the rules, risks, and agent responsibilities
Chapter 1 Review
Quick review of all key concepts, cheat sheet, and exam prep
The Big Picture: How Insurance Gets Started
This entire chapter follows one journey - from a customer walking in the door to having a policy in hand.
1. Apply
Fill out app
2. Verify
Check info
3. Underwrite
Approve risk
4. Deliver
Give policy
5. Explain
Walk through it