Chapter Five Exam

An insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application?

A good health statement

In what situation could an insurance policy's coverage be modified?

Applicant is a substandard risk

The principal source of information concerning an applicant's identity, age, and marital status is found in the

Completed application

What must be given to a life insurance applicant when the agent receives an application and the initial premium?

Conditional receipt

Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective?

Date of issuance of the conditional receipt

Insurable interest in one's own life is legally considered as

Generally unlimited

When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?

Give notice, explain, and allow opting out

The initial premium for a life insurance policy is typically paid in what way?

It is typically obtained by the producer and forwarded to the insurer

A signed good health statement may be requested by a life producer at the time of

Policy delivery

K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?

The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?

When the conditions of the receipt are met

After an insurance application has been originated, the producer normally

is the major personal contact to the insured

Which of these is NOT used as a selection criteria in the underwriting process of a life insurance application?

national origin

Where is the difference between a standard risk and a substandard risk reflected?

premium charges

The reason for backdating a policy is

to obtain a premium rate based on an earlier age