Underwriting = stop adverse selection + classify risk (preferred / standard / substandard).

Substandard → extra premium, exclusion rider or reduced terms.

HIV: no decline based solely on a positive test; actuarially sound underwriting is allowed.

Genetic characteristic = no symptoms yet; commissions cannot vary by test result.

MIB: cross-check the application, never decide on the file alone.

APS = the treating doctor's report.

Declination: specific reason in writing at the time of the decision.

Morbidity and expenses raise rates; investment return lowers them; longer elimination period = lower premium.

Own occupation is easiest for the insured to meet; Social Security is the strictest (12 months, total only).

Nonoccupational = off-the-job disabilities only; job injuries go to workers' comp.

Benefits are capped below earnings to keep the incentive to return to work.

Overhead expense pays the business's bills, not the owner's salary; buyout funds a buy-sell agreement.

Race, religion, national origin, etc. cannot by itself justify a higher rate.

You pay the premium with after-tax money → benefits tax-free. Employer-paid share → taxable.

Notice of claim: within 20 days, or as soon as reasonably possible.

Future purchase option = more benefit later without medical evidence; COLA = inflation adjustment during a claim.

Recurring disability within the stated period = same claim, no new elimination period.

Residual benefit = full benefit × percentage of income lost.