Insurance- underwriting

An insurer requests that an applicant for life insurance undergo an HIV test. Which of the following is true? Select one: a. A consent form must be signed by the applicant prior to the test. b. The insurer can inquire about the applicant's sexual orientation. c. Insurers can target specific populations for HIV testing. d. HIV testing cannot be used for underwriting.

a. A consent form must be signed by the applicant prior to the test.

Which of the following best describes the MIB? Select one: a. Nonprofit trade organization that supplies insurability information to member companies b. Government agency that collects information about individuals' life and health insurance policies c. State organization that catalogs individuals' life and health insurance claims d. Group of federally-appointed physicians that monitor the medical treatments received by individuals insured by private companies

a. Nonprofit trade organization that supplies insurability information to member companies

What is the basic source of information for life insurance underwriting and policy issue? Select one: a. Medical Information Bureau b. Application c. Consumer reports d. Physician reports

b. Application

Which of the following best describes a life insurance policy in which the proposed insured is not required to undergo a medical examination? Select one: a. Easy policy b. Simply-issued policy c. Simplified issue d. Standard coverage policy

c. Simplified issue

This employee of the insurer assigns risk categories to applicants: Select one: a. Broker b. Agent c. Underwriter d. Actuary

c. Underwriter

All of the following are involved in the collection of an applicant's medical history, EXCEPT: Select one: a. The application for the insurance policy b. The attending physician statement c. The agent report d. The consumer report

d. The consumer report

Which of the following best describes the process used to select and classify risks? Select one: a. Rating b. Discrimination c. Risk classification d. Underwriting

d. Underwriting

Which of the following is the primary source of information used in underwriting an insurance policy? Select one: a. Attending physician statement b. Application c. Agent report d. Medical Information Bureau

b. Application

The term attributed to the person who applies for insurance coverage is _______; the term attributed to the person insured by the policy is ________. Select one: a. Beneficiary; applicant b. Insured; insurer c. Policyowner; insurer d. Applicant; insured

d. Applicant; insured

Insurance agent Margaret receives life insurance applications from Tim and Tom, who are identical twins, and are each applying for the exact same type of policy with the same face amount. The insurance company issues the policies as applied for, but charges Tom a 15% higher premium. Which of the following best explains the higher premium charged to Tom? Select one: a. Longer free look period b. Insuring clause c. Tom had to undergo a medical examination d. Tom's risk classification

d. Tom's risk classification

Which part of the insurance application is described by the following: the applicant's general information, including name, date of birth, age, sex, social security number, marital status, address, occupation and income are collected? Select one: a. Part 1 b. Part 2 c. Part 3 d. None of the above

a. Part 1

James has above average health and is physically active. He has never smoked. Which risk classification will James most likely be rated? Select one: a. Preferred b. Standard c. Substandard d. Declined

a. Preferred

The process of selecting and classifying risks is best described by which of the following terms? Select one: a. Underwriting b. Classification c. Designation d. Specification

a. Underwriting

Which report may contain information gathered through interviews with friends and neighbors, employers and coworkers, who know the insured? Select one: a. Agent's report b. Investigative report c. Medical report d. Insurer's report

b. Investigative report

All of the following are important underwriting factors for risk classification in a health insurance policy, EXCEPT: Select one: a. Physical condition b. Marital status c. Financial status d. Occupation

b. Marital status

Part II of the life insurance application includes: Select one: a. The agent's statement or report b. Medical Information c. General Information d. Inspection Statement

b. Medical Information

The MIB is best described as: Select one: a. A private underwriting group b. A government agency that collects credit information c. A nonprofit organization that supplies insurability information d. None of the above

c. A nonprofit organization that supplies insurability information

Gerald has a chronic medical condition. What will his risk classification be? How will his premium be affected? Select one: a. Gerald's risk classification will be preferred. His premium will be higher. b. Gerald's risk classification will be standard. His premium will be lower. c. Gerald's risk classification will be substandard. His premium will be higher. d. Gerald will be denied coverage.

c. Gerald's risk classification will be substandard. His premium will be higher.

What action will the life insurance company most likely take when an applicant for a life insurance policy is discovered to be substandard risk? Select one: a. Decline issuance of the policy b. Require the applicant undergo a physical examination c. Require the applicant pay additional premium d. Request the applicant provide proof of insurability for the past 10 years

c. Require the applicant pay additional premium

Rates for insurance policies are based on: Select one: a. Marital status and age b. Sex, age and marital status c. Sex and age d. Sex only

c. Sex and age