Completing the application, underwriting, and delivering the policy (primerica)

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IMPORTANT

A life insurance producer is the company's field underwriter

Applicant

Applicant or proposed insured, a person applying for insurance

Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?

Buyer's Guide

IMPORTANT

NO premium NO coverage

Insured

A person covered by an insurance policy

Insurer

(principal) the company who issues a policy of insurance

IMPORTANT

A buyer's guide provides generic information on various types of policies. A policy summary provides specific information on the policy being issued

Beneficiary

A person who receives the benefits of an insurance policy

The term "illustration" in life insurance policy refers to

A presentation of non-guaranteed elements of a policy

What are the 4 required elements of an insurance contract?

Agreement, Consideration, Competent parties, legal purpose

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

IMPORTANT

An insurance application is the key source underwriters use for information about the applicant

All of the following are duties and responsibilities of producers at the time of application except

Any Change to information on an application must be initialed by the applicant

Which of the following is the basic source of information used by the company in the risk selection process?

Application

When must insurable interest exist in life insurance?

At the time of application

Important

Conditional receipt means the applicant may be covered as early as the date of the application

Representations are written or oral statements made by the applicant that are

Considered true to the best of the applicants knowledge.

A producer agent must do all of the following when delivering a new policy to the insured except

Disclose commissions earned from the sale of the policy

What two parts make up a life insurance application?

General information and medical information

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent.

IMPORTANT

Insurable interest must exist at the time of the application

IMPORTANT

Insurance is the transfer of risk loss. The cost of an insured's loss is transferred over to the insurer and spread among other insureds

IMPORTANT

Insurer's consideration is the promise to pay for losses; insured's consideration is the payment of premium and statements on the application

IMPORTANT

Insurers cannot refuse coverages solely on the basis of adverse information on an MIB report

IMPORTANT

Insurers must obtain a certificate of authority prior to transacting business in this state

Fraud

Intentional misrepresentation or deceit with the intent to induce a person to part with something of value

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary

Which of the following information about the applicant is not included in the general information section of the application for insurance?

Medical Background

IMPORTANT

Representations are statements believed to be true. Insured's statements on the application are representations.

Death Benefit

The amount paid upon the death of the insured in a life insurance policy

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

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

IMPORTANT

The higher the risk, the higher the premium

If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?

The insurer

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application

IMPORTANT

The policyowner must have insurable interest in the life of the insured

All of the following are requirements for life insurance illustrations except

They must be part of the contract

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

To help the insured understand all aspects of the contract

insurance policy

a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events

life insurance

coverage on human lives

IMPORTANT

insurance applicants must be notified in writing whenever insurers request investigative consumer reports

Lapse

policy termination due to nonpayment of premium

Premium

the money paid to the insurance company for the insurance policy

Policyowner

the person entitled to exercise the rights and privileges in the policy


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