Written Business in Life Insurance: Uninitiated Coverage ✍️
Definition & Meaning
Written Business: A life insurance term referring to a policy that is expected to begin but for which the coverage has not started yet. It signifies that an application for the policy has been made and accepted, pending final underwriting and issuance.
Etymology
The term “written business” stems from the insurance and finance industry’s jargon. It encapsulates the process of “writing” or documenting an insurance policy that is awaiting final approval and activation.
Background
In the realm of life insurance, securing a policy typically involves a series of meticulous steps. “Written business” indicates a halfway milestone—where the intention to insure is documented but certain formalities like medical checks, final underwriting, or first premium payments are still pending.
Key Takeaways
- Interim Stage: Written business marks an intermediate phase between application submission and policy activation.
- Pending Status: Denotes that all or part of the underwriting process is underway but not yet finalized.
- Assumed Validity: Conveys that upon complete approval, the policy will be effective retroactively from the original application date or a specified date.
Differences and Similarities
- Differences:
- Active Policy: Coverage has started and the policy is in effect.
- Binding Receipt: Temporary insurance provided during the underwriting process.
- Similarities:
- Both written business and active policies signify a contractual agreement between insurer and policyholder.
- Written business and binding receipts can lead to active policy status upon satisfactory completion of terms.
Synonyms
- Pending Policy
- Application in Progress
- Tentative Coverage
Antonyms
- Active Policy
- In-force Policy
- Effective Coverage
Related Terms with Definitions
- Underwriting: The process by which insurers assess the risk and determine the terms and premium for coverage.
- Binding Receipt: A temporary coverage granted during the policy application phase until the final decision.
Frequently Asked Questions
What happens after an insurance policy is classified as written business?
Upon completion of underwriting and fulfillment of all initial requirements (e.g., premium payment), the policy then moves from written business to an active, in-force status.
Does written business offer any coverage?
No, written business itself does not offer coverage. It’s simply an intermediary step indicating the policy is being processed.
Exciting Facts
- In some cases, insurers may opt to provide conditional or temporary coverage while the application is still being processed, often termed a binding receipt or conditional binding.
Quotations
“An insurance policy is not a capturing of future events but a well-scripted promise that underscores trust.” — Adam Peters, Insurance Industry Expert
Proverbs
“The best time for insurance was yesterday; the next best time is today.” — Common Proverb
Literature and Further Studies
- “Principles of Insurance” by George E. Rejda
- “Insurance Theory and Practice” by Rob Thoyts
- Government Regulations: Review the Insurance Underwriting Process as outlined by the National Association of Insurance Commissioners (NAIC).
Humorous Farewell
Remember, an underwritten policy keeps uncertainty in tow, but a written business? It’s just on the go! Hasta la vista, coverage anticipators!
