Chapter 8

When Harry completed his insurance application, the agent discovered that he was under treatment for a chronic condition. In order to gather the necessary information, Harry's agent ordered a/an:

An attending physician statement

Which of the following statements is correct regarding changes in the application?

Any change or correction must be initialed by the applicant

Policy replacement is the process of:

Cancelling an existing policy and issuing a new policy

If the premium is paid at the time of application, the agent will provide the applicant with a:

Conditional receipt

A producer gathers information about the applicant for the insurer in order to avoid adverse selection. This is considered to be:

Field underwriting

Which of the following documents used for underwriting can be completed by talking to the proposed insured over the phone?

Inspection report

Ultimately, insurability of an applicant is determined by the

Insurer's home office underwriter

The _________ alerts insurer home office underwriters of errors, omissions, or misrepresentations made on insurance applications.

MIB

If a policy is issued with a surcharge, this means that the

Policy was issued with a higher premium due to the increased risk

During the underwriting process, an underwriter was alerted that the applicant previously failed a medical exam by testing positive for marijuana while applying for a disability income policy 2 years ago. Which of the following sources provides this type of information to assist member companies when determining the eligibility of an individual risk?

Medical Information Bureau

The prior medical conditions for which the applicant has received, or should have received, medical advice or treatment within a specified period before the effective date of a policy are called:

Pre-Existing Conditions

Which of the following has primary responsibility for ensuring that the application is filled out completely?

Producer

The __________ is the person applying for insurance coverage and is responsible for completing an application.

Policy-owner

Which of the following best describes the agent's report?

A personal statement provided by the agent/producer to the insurer clarifying or providing additional information based on the application as part of the underwriting process

P has had some health issues over the years and is not confident he will qualify for standard issue insurance. If P completes an application and submits it to the insurance company without paying the premium up-front, coverage will take effect

When the policy is delivered to P and the premium is paid

Which of the following items does not become part of the insurance contract as defined in the entire contract clause?

The agent's report