lifeins ch 2 - LIFE INSURANCE BASICS Life insurance has a...

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LIFE INSURANCE BASICS Life insurance has a unique advantage over other types of insurance: it performs the function of cash accumulation. The company will discriminate in favor of good risks and not of poor risks; however, it cannot discriminate unfairly by using factors such as race or national origin in their underwriting. Are insurance company underwriters allowed to discriminate? Yes, but not unfairly A key person insurance policy will pay for costs of running the business and replacing the employee. All advertisements, except institutional advertisements, must disclose the nature of the product and may not avoid a clear and unequivocal statement that insurance coverage is the subject of solicitation. Which of the following is NOT true, regarding life insurance advertisements? a) All types of advertisements must describe the nature of the product. b)The identity of the insurer must be disclosed. c)It must be stated that insurance coverage is the subject of solicitation. d) Human life value approach is determined by the loss of income that would result with the death of the insured, after making adjustments for expenses, inflation, etc. The Human Life Value Approach to determining the value of an individual’s life requires the calculation of probable future earnings of the insured, which involves wages, expenses, inflation, amount of time until retirement, and the time value of money. Predicted needs of the family after the insured's death are used in the needs approach. A projection of insurance needs that is based upon the capitalization of an applicant's future earnings is …. . The insurance company underwriter could find information concerning the personal activities and character
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This note was uploaded on 11/22/2010 for the course LIFE INSUR 245 taught by Professor Knowles during the Spring '10 term at El Centro College.

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lifeins ch 2 - LIFE INSURANCE BASICS Life insurance has a...

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