Chapter 1 Quiz's

Pay the policy proceeds only if it would have issued the policy

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Tax Delinquencies Late payments Failure to pay off a loan

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer

Fair Credit Reporting Act

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company

Lower premiums than a person who receives a standard risk

An applicant who receives a preferred risk classification qualifies for

The date of the medical exam

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. five days later the applicant had to submit to a medical exam. If the policy issued, what would be the policy's effective date?

inspection report

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that.

Inspection report

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of report is that?

Consideration Legal purpose Offer and acceptance

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following

charge a higher premium

If an applicant for a life insurance policy is found to be a substandard risk, the company is most likely to

past medical history present physical condition present occupation

In classifying a risk, the Home Office underwriting department will look at all of the following

The customer's associates, friends, and neighbors provide the report's data

In comparison to the consumer reports, which of the following describes a unique characteristic of investigative consumer reports

An applicant submits an application to the insurer

In insurance, an offer is usually made when

It is intended to provide coverage on a date prior to the policy issue

what is the purpose of a conditional receipt?

The person must not be under the influence The person must be of legal age The person must be mentally competent to understand the contract

In terms of parties to a contract, which of the following does describe a competent party

protect private customer information filed with a financial institution

The Gramm-Leach-Bliley Act was passed to

Conditional

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract

A presentation of non guaranteed elements of a policy

The term illustration in a life insurance policy refers to

must be informed of the source of the report

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

when the application is signed and a check is given to the agent

when is the earliest a policy may go into effect

not taxable since the IRS treats them as a return of a portion of the premium paid

On a participating insurance policy issues by a mutual insurance company, dividends paid to policyholders are

Return to the applicant for completion of the

The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What must the insurer do with the application?

material misrepresentations

Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company are called

policy summary

What describes the specific information about a policy

$2,500

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act

return the application to the applicant for completion of the

Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?

Exchange of unequal values

Which of the following best describes the aletory nature of an insurance contract

selection, classification, and rating of risks

Which of the following best details the underwriting process for life insurance

The Medical information Bureau

Which of the following would provide an underwriter with information concerning an applicant's health history

to help the insured understand all aspects of the contract

Why should the producer personally deliver the policy when the first premium has already been paid out?

Consideration

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following.