Risk Selection
Methods by which a home office underwriter chooses applicants that an insurer will accept. The underwriter's job is to spread the costs equitably among members of the group to be insured. Therefore, the underwriter must determine which are normal risks, or standard risks, to be charged the standard rate; which are substandard risks, to be charged a higher rate; and which are preferred risks, to receive a discount. This process is made more difficult by SELF-SELECTION and ADVERSE SELECTION. The underwriter must screen applicants who are looking for insurance, specifically because they have a greater-than-normal chance of loss, and set the correct PREMIUM rate for them.
Popular Insurance Terms
Type of guaranteed investment contract in which funds for the contract are placed in the insurance company's separate account. ...
Legislation that provided temporary rules for implementing the employee retirement income security act of 1974 (erisa). ...
Effort by an individual to continue to receive disability income benefits by taking a continuing sickness or injury. ...
Stealing small amounts of property. Insurance coverage is available under a number of policies. ...
Return of a percentage of premium paid by a business firm if its loss record is better than the amount loaded into the basic premium. ...
Difference between the yield on earning assets and the cost of interest-bearing liabilities. ...
Latin phrase meaning "without which not," signifying a legal rule in tort and negligence cases. Under this rule, a plaintiff trying to prove that an injury was a direct result of a ...
Requirement that the deductible must be met for each separate illness or accident before benefits are payable under major medical insurance. ...
Conveying of assets from the donor to the beneficiary as a means of minimizing the legal tax obligation of the estate of the donor and avoiding probate. ...
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