Key Concepts
Binding Receipt - Given by a company upon an applicant's first premium payment. The policy, if approved, becomes effective from the date of the receipt.
Conditional Receipt - Given to the policyowners when they pay a premium at time of application, which binds the insurance company if the risk is approved as applied for, subject to any other conditions stated on the receipt.
Medical Information Bureau - A service organization that collects medical data on life and health insurance applicants for member insurance companies.
Preferred Risk - A person whose physical condition, occupation, mode of living and other characteristics indicate a prospect for longevity for unimpaired lives of the same age.
Standard Risk - A person who, according to a company's underwriting standards, is entitled to insurance protection without extra rating or special restrictions.
Substandard Risk - A person who is considered an under-average or impaired insurance risk because of physical condition, family or personal history of disease, occupation, residence in unhealthy climate or dangerous habits.
Underwriting - Process through which an insurer determines whether, and on what basis, an insurance application will be accepted.
Familiarize yourself with the Key Concepts in the Florida study manual, Unit 9.
