Chapter Quiz EXAM FX (Completing the applications, Underwriting, and Delivering the policy.
Substandard risk
Which of the following types of risk will result in the highest premium?
Signed waiver of premium
upon policy delivery, the producer may be required to obtain any of the following except
A.Note on the application the reason for the change. B.Destroy the application and complete a new one. C. Draw a line through the first answer, record the correct answer, and have the applicant initial the change.
If a change needs to be made to the application for insurance, the agent may do all of the following
Statement of good health, Payment of premium, Delivery of receipt.
Upon policy delivery, the producer may be required to obtain any of the following
Stranger-Originated life insurance (STOLI)
is a life insurance arrangement in which a person with no relationship to the insured (a "stranger") purchases a life policy on the insured's life with the intent of selling the policy to an investor and profiting financially when the insured dies. In other words, _____ are financed and purchased solely with the intent of selling them for life settlements.
Buyer's Guide
provides generic information about life insurance polices and allows the consumer to compare the costs of different policies. The policy summary provides specific information about the issued policy, as well as the insurer's information.
To allow the consumer to compare the costs of different policies.
What is the purpose of the buyers' guide?
Material misrepresentation
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Issue the policy anyway and pay the face value to the beneficiary.
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
When the application is signed and a check is given to the agent.
When is the earliest a policy may go into effect?
Part 2
Which part of an insurance application would contain information regarding the applicant's medical history?
Illustration
It means a presentation or depiction that includes nonguaranteed elements of a policy of individual or group life insurance over a period of years.
A policy summary
Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?
Buyer's Guide
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?
Part 2
Medical information of the application includes information on the prospective insured's medical background, present health, any medical visits in recent years, medical status of living relatives, and causes of death of deceased relatives.
Erase the incorrect answer and record the correct answer.
If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT
The customer's associates, friends, and neighbors provide the report's data.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
Insurable Interest
Stranger-originated life insurance policies are in direct opposition to the principle of
Substandard
indicates that an individual represents an under-average insurance risk because of physical condition, personal or family history of disease, occupation, habits or hobbies. This rating incurs the highest premium if policy is issued.
The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.
An appliclation signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is TRUE?
Conditional
Requires both the insurer and policyowner to meet certain conditions before the contract can be executed, unlike other types of policies which put the burden of condition on either the insurer or the policyowner.
Conditional
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
A presentation of nonguaranteed elements of a policy.
The term "illustration" in a life insurance policy refers to