Helping Hand Questions for OH-Life-Agent-Series-11-44

Adverse selection occurs when individuals with higher-than-average risk are more likely to seek or continue insurance coverage. In group life insurance, insurers use underwriting guidelines and participation requirements (e.g., minimum group size, employer-employee relationship) to avoid insuring groups that disproportionately consist of high-risk individuals. The goal is to ensure a balanced risk pool.

Under Ohio regulations governing viatical settlements, insurers are required to respond to a verification of coverage request within 30 calendar days. This ensures timely processing and supports consumer protection during transactions involving the sale of life insurance policies.

In insurance terminology, a peril is the specific cause of a loss. In this scenario, the peril is fire, as it is the direct cause of the damage to the grocery store. While the furnace malfunction and sparks are contributing factors, and the cleaning rags may be considered hazards, the fire is the peril that resulted in the loss.

Decreasing term insurance provides a death benefit that reduces over time, typically in line with the declining balance of a mortgage. This makes it a low-cost option for mortgage protection. Since the coverage decreases with the loan, the premium is generally lower than level term insurance.