Chapter 5 Exam: Underwriting and Policy Issue

A Medical Information Report (MIB) report may disclose which of the following:

Prior use of marijuana

Which of these actions should a producer take when submitting an insurance application to an insurer?

Inform insurer the critical parts of the policy issued

The reason for backdating a policy is

to obtain a premium rate based on a earlier age

An agent gives a conditional receipt to a client for a policy after collecting the initial premium. When will the policy be effective

When the conditions of the receipt are met

An incomplete life insurance application submitted to an insurer will result in which of these actions?

Application will be returned to writing agent

On Aug 6, D submitted an application for $50,000 life policy. On Aug 18, doctor stated he had chest pains. The life policy was delivered on the 20th but never gave initial premium. What action should producer take?

Collect initial premium with a signed health statement

Under the USA Partriot Act, insurers are required to report receipt of cash payments in excess of:

$10,000

What is the initial source of underwriting for insurance?

Application containing statements from insured

A pilot applies for life insurance. The answer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will likely issue coverage with a(n):

Aviation Exclusion

A life policy may be rejected from all except:

Rating Services

When a policyholder cash surrenders a Universal Life Policy in its early years, this may be considered a red for a(n):

Anti-Money Laundering Violation

An underwriter determines that a life insurance applicant's risk should be reclassified due to a health issue. This policy may be issued with a(n):

Extra premium

What is the purpose of a policy summary?

It highlights the critical parts of the policy issued

Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?

Policy was returned within the free-look period, premium will be fully refunded

Which factor is taken to consideration with premium rates for a whole life policy?

Risk Classification

Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT

Signed HIPAA Disclosure

When an application is taken by a producer who is required to put their initials down to make any changes on the application?

The Applicant

In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and...

The initial premium

Upon delivery, a signed good health statement is requested from the applicant. Why would this be neccesary?

The initial premium was NOT submitted with the application with the applicant

Upon policy delivery, a signed good health statement is requested from the applicant, why would this be necessary?

The initial premium was not submitted with the application

ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has

Waived one of its legal rights

What is the purchase of the USA Patriot Act?

Detect and Defer Terrorism

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

Conditional

T applies for policy and producer states insurer is bound to coverage as the date of application or medical exam. Assuming T is at acceptable risk, what item is given to T?

Conditional Receipt

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T?

Conditional Reciept

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

Free-Look period has expired

The underwriting process involves all of these EXCEPT for

Policy Loan

Which of these do NOT constitute policy delivery?

Policy issued with a rating

Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine:

Probability of making timely premium payments

What is being delivered during a policy delivery?

Insurance contract to the proposed insured

Any changes made on an insurance application requires the initials of whom?

Applicant

What action should a producer take if the initial premium is not submitted with the application?

Forward the application to the insurer without the initial premium