Chapter 5 Exam - Life Underwriting

The underwriting process involves all of these EXCEPT for

Credit report *Policy loan* Risk classification Application

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?

*Fair Credit Reporting Act* Medical Information Bureau Part III of the application Life Insurance Buyer's Guide

What is being delivered during a policy delivery?

A binding receipt to the proposed insured *Insurance contract to the proposed insured* Application and initial premium to the insurer Policy summary sheet and disclosure material to the proposed insured

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Agent's report MIB report *Inspection report* Attending physician's report

Which of the following statements is CORRECT about an agent who is taking an insurance application?

The agent should avoid asking the applicant questions that may cause embarrassment *The agent should have the applicant initial any changes made on the application* The agent may allow a member of the applicant's immediate family to sign the application if the applicant is not available The applicant may answer routine questions on the application for the applicant

In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and

a Medical Information Report *the initial premium* forward it immediately to the insurer Attending Physician Statement

P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P's coverage becomes effective when

*P receives the policy and pays the premium* P passes the medical examination the producer receives the policy the insurance company approves the policy

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?

*Risk classification* Warranty review Insurable interest Inspection report

All of these are considered sources of underwriting information about an applicant EXCEPT

Inspection Report Credit Report *Rating Services* Medical Information Bureau

On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?

Collect initial premium *Collect initial premium along with a signed health statement* Explain to the applicant the policy is no longer in effect due to change in health condition Collect initial premium and leave a binding receipt

Which of these do NOT constitute policy delivery?

Policy mailed to applicant Policy mailed to agent Policy delivered to the applicant by the agent *Policy issued with a rating*

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the

agent applicant's spouse National Association of Insurance Commissioners (NAIC) *applicant's physician*

Which of these actions should a producer take when submitting an insurance application to an insurer?

Issue a binding receipt to applicant if no initial premium is submitted Disclose to the applicant the amount of commissions to be earned on this transaction *Inform insurer of relevant information not included on the application* Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?

Deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account *Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company* Cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company Deposit the check in to his personal account, use the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company

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 sales appointment was made The date the application was submitted to the insurance company The date of application *The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured*