Completing the application, underwriting, and delivering the policy (primerica)
IMPORTANT
A life insurance producer is the company's field underwriter
Applicant
Applicant or proposed insured, a person applying for insurance
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?
Buyer's Guide
IMPORTANT
NO premium NO coverage
Insured
A person covered by an insurance policy
Insurer
(principal) the company who issues a policy of insurance
IMPORTANT
A buyer's guide provides generic information on various types of policies. A policy summary provides specific information on the policy being issued
Beneficiary
A person who receives the benefits of an insurance policy
The term "illustration" in life insurance policy refers to
A presentation of non-guaranteed elements of a policy
What are the 4 required elements of an insurance contract?
Agreement, Consideration, Competent parties, legal purpose
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?
Aleatory
IMPORTANT
An insurance application is the key source underwriters use for information about the applicant
All of the following are duties and responsibilities of producers at the time of application except
Any Change to information on an application must be initialed by the applicant
Which of the following is the basic source of information used by the company in the risk selection process?
Application
When must insurable interest exist in life insurance?
At the time of application
Important
Conditional receipt means the applicant may be covered as early as the date of the application
Representations are written or oral statements made by the applicant that are
Considered true to the best of the applicants knowledge.
A producer agent must do all of the following when delivering a new policy to the insured except
Disclose commissions earned from the sale of the policy
What two parts make up a life insurance application?
General information and medical information
A life insurance policy has a legal purpose if both of which of the following elements exist?
Insurable interest and consent.
IMPORTANT
Insurable interest must exist at the time of the application
IMPORTANT
Insurance is the transfer of risk loss. The cost of an insured's loss is transferred over to the insurer and spread among other insureds
IMPORTANT
Insurer's consideration is the promise to pay for losses; insured's consideration is the payment of premium and statements on the application
IMPORTANT
Insurers cannot refuse coverages solely on the basis of adverse information on an MIB report
IMPORTANT
Insurers must obtain a certificate of authority prior to transacting business in this state
Fraud
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value
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
Issue the policy anyway and pay the face value to the beneficiary
Which of the following information about the applicant is not included in the general information section of the application for insurance?
Medical Background
IMPORTANT
Representations are statements believed to be true. Insured's statements on the application are representations.
Death Benefit
The amount paid upon the death of the insured in a life insurance policy
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The consumers associates, friends, and neighbors provide the report's data
IMPORTANT
The higher the risk, the higher the premium
If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?
The insurer
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its right to have an answer on the application
IMPORTANT
The policyowner must have insurable interest in the life of the insured
All of the following are requirements for life insurance illustrations except
They must be part of the contract
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
insurance policy
a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events
life insurance
coverage on human lives
IMPORTANT
insurance applicants must be notified in writing whenever insurers request investigative consumer reports
Lapse
policy termination due to nonpayment of premium
Premium
the money paid to the insurance company for the insurance policy
Policyowner
the person entitled to exercise the rights and privileges in the policy
