Chapter 2

A person making application, for themselves or another, to be insured under an insurance policy is called the: a) Applicant b) Fiduciary c) Sponsor d) Beneficiary

a) Applicant

All of the following are true regarding an attending physician's statement (APS) except: a) an MIB report can be used in place of an APS b) the insurer pays the physician for completing and forwarding the APS c) applicants must sign a release in order for their physician to respond to an APS request d) they are used in cases where the application or medical records reveal conditions that require further explanation

a) an MIB report can be used in place of an APS

In a replacement transaction, the insurer that is having its policy replaced is known as the _______insurer. a) existing b) replacing c) conserving d) insolvent

a) existing

The term 'mode' refers to the: a) Rate the underwriters apply to the policy b) Frequency of premium payments c) Claims process d) Method used in policy delivery

b) Frequency of premium payments

Applicants must consent to be tested and be informed that testing for _____ may determine insurability. a) nicotine b) HIV c) blood alcohol d) legal drugs

b) HIV

The Medical Information Bureau (MIB) is formed by: a) Employers b) Insurance companies c) The Government d) Medical professsionals

b) Insurance companies

Which of the following best describes a Statement of Good Health? a) It is the producer's authority to raise the rate if the insured does not appear to be in good health at the time of policy delivery b) It verifies that the insured has not suffered a serious illness or injury requiring surgery or hospitalization since the application date c) It is what comes along with the policy at the time of delivery confirming the underwriting class the insured falls into if the policy was issued standard or better d) It is a sworn oral statement made by the insured at time of delivery which allows for coverage to come into effect

b) It verifies that the insured has not suffered a serious illness or injury requiring surgery or hospitalization since the application date

If an applicant is a minor, who signs the application? a) A probate court judge b) Their guardian c) The produce d) Any adult

b) Their guardian

Which of the following is used by an insurer to collect information from the applicant/insured for underwriting purposes? a) an amendment b) an application c) a receipt d) a rider

b) an application

Ultimately it is up to the ______ to determine if the proposed insured is an acceptable risk. a) home office actuary b) field underwriter c) home office underwriter d) insured's primary care physician

c) home office underwriter

In a replacement sale all of the following are producer responsibilities, except: a) provide copies of the notice regarding replacement and any sales proposals to the applicant and replacing insurer b) complete a notice regarding replacement with applicant and producer signatures c) reimburse the applicant for any surrender charges that may be incurred as a result of the transaction d) obtain information regarding the enforce policies including name and policy number

c) reimburse the applicant for any surrender charges that may be incurred as a result of the transaction

When an insurer requires that an insured be subject to a medical examination, who pays for the medical exam? a) the producer b) the insured c) the insurer d) the applicant

c) the insurer

A producer must include their name and address on which of the following? a) Any policy amendment or rider b) An insurance policy's cover page c) A buyer's guide d) A policy summary

d) A policy summary

All of the following become part of the entire contract except: a) the policy itself b) a copy of the application c) any riders d) a copy of the check

d) a copy of the check

Under what circumstances should the producer obtain a statement of good health? a) when the client wants to obtain a quote b) at the first client meeting to determine if an application should be completed c) at the time of application in cases where the producer wants to be sure the applicant is not withholding any information d) if no premium was paid at time of application and the policy is now being delivered

d) if no premium was paid at time of application and the policy is now being delivered