CH 6: The Life Insurance Underwriting and Policy Issue

Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application?

A good health statement

Preferred risk policies with reduced premiums are issued by insurance companies because the insured has what?

Better than average mortality or morbidity experience.

An insurer has a right to screen applicants for HIV in which of the following ways?

Blood Test for HIV

In which of the following relationships would there NOT be an insurable interest? -Parent to child -Business partner to business partner -Brother to sister -Business owner to business customer

Business owner to business customer

Which of the following would be considered an underwriting duty of an agent?

Completing all applications and collecting initial premiums

The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement? -An agent establishes insurable interest -An individual does not have insurable interest on his or her own life -Insurable interest only pertains to business arrangements -Insurable interest can be based on the love and affection of individuals related by blood or law

Insurable interest can be based on the love and affection of individuals related by blood or law

What is involved when a life insurance policy has been backdated? -Setting a policy's effective date prior to a preexisting condition -Redating a policy after it has been issued -Reinstating a lapsed policy -Making the policy effective on an earlier date than the present

Making the policy effective on an earlier date than the present

All of these are considered key factors in underwriting life insurance EXCEPT Tobacco Use Healthy History Age Martial Status

Martial Status

All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT : Agent's Report Medical Information Bureau MIB Inspection Reports National Association of Insurance Underwriters

National Association of Insurance Underwriters

Which of these is NOT considered to be a risk factor in life insurance underwriting? Number of children health history hobbies Occupation

Number of Children

Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? standard risk Preferred risk substandard risk unacceptable risk

Substandard risk

What would be a valid reason why a policy premium would be higher than the standard premium?

The insured does not meet established underwriting requirements.

Which of the following pertains to the analysis of an applicant's personal information and determining whether insurance should be issued or declined? adverse calculation Underwriting Risk Classification Actuarial determination

Underwriting

An individual most likely will have an insurable interest in insuring a person's life if: -an economic interest exists for the continuance of the insured's life -a financial interest exists at the time of insured's death -there is any blood relationship with the insured -a business relationship exists

an economic interest exists for the continuance of the insured's life

An insurance applicant with a below-average likelihood of loss is typically considered to be a: -preferred risk -subpar risk -declined risk -standard risk

preferred risk