Credit Life and Accident and Health Insurance
The commercial system provides for the setup, tracking, billing, and payment of Credit Life and Accident and Health Insurance. Three insurance types can be established on each policy: Credit Life, A & H, or “other,” which is used for reporting and provides a convenient label to identify each insurance policy. Other information related to the policy is not edited by this policy type, meaning you may establish a fire or flood insurance policy with the same characteristics as a Credit Life insurance policy, or a Credit Life insurance policy with the same characteristics as an A & H insurance policy.
One of several premium types may be established on each policy, including accruing, computed on average balance, computed on outstanding balance, fixed/level, and prepaid. This provides for insurance policies that are paid in full upfront, as well as providing several options for those policies that are billed to the customer.
Several coverage types are available to be used on each policy, including average balance, fixed/level, decreasing gross, decreasing net, remaining payments, and reducing term. This provides for insurance policies with fixed coverage amounts, coverage amounts in relation to the loan balance, and straight-line reductions in coverage; all done automatically by the system.
An insurance policy may be established as a single or joint coverage policy. Our system even provides different accruing rates at the insurance company level for each type of policy.
THe system offers rebate codes at multiple levels. At the insurance company level, the rebate code defines the type of rebate to be given to a customer with this type of insurance policy. This information is typically controlled by the insurer. Those options include the full premium paid, a pro-rata portion of the premium, a Rule-of-78s calculation using the premium, and an average of the pro-rata and Rule-of-78s.
At the insurance policy level, you may allow or disallow rebate processing for a given policy (regardless of the rebate code at the insurance company level). This allows you to establish under a loan an insurance policy in which no rebates will be given, even though the insurance company may allow rebates of some sort on the insurance policy.
The commercial system offers a cancellation age at the insurance company level, as well as a number of days in advance of reaching that age an insured person should be notified of their pending cancellation. It also offers an age cancellation code at the insurance policy level, which can be used to activate or de-activate the age cancellation process.
A delinquency cancellation code is also offered at the insurance policy level, which can be used to cancel the insurance policy when the loan goes into nonaccrual.
At the insurance-company level, the system offers options on how premiums are to be divided among the insurer, bank, and/or the officer or agent selling the insurance. A bank may also eliminate any of the categories.