Field Underwriting Procedures

Which of the following is NOT an essential element of an insurance contract? A - Counteroffer B - Consideration C- Agreement D- Legal Purpose

A - Counteroffer

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?

Adhesion

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

In insurance, an offer is usually made when

An applicant submits an application to the insurer

If an agent makes a correction on the application for health insurance, who must initial the correct answer?

Applicant

What is the term used for a written request for an insurer to issue an insurance contract based on the provided information?

Application

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?

At the time of application

Which document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

Which of the following? A - The promise to pay covered losses B- The application given to a prospective insured C- Something of value exchanged between parties D- The premium amount paid at the time of application

B- The application given to a prospective insured

An insurance contract must contain all of the following to be considered legally binding EXCEPT A - Offer and acceptance B - Consideration C - Competent parties D - Beneficiary's Consent

Beneficiary's Consent

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

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?

Conditional

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Contracts of adhesion

Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT A - Due to age or health, the policy may change dramatically B - Pre-existing conditions that were previously covered may not be covered under the replacing policy C - Benefits may change D - Premiums always stay the same

D - Premiums always stay the same

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values

Under the Privacy Rule for HIPPA, protected information includes all individually identifiable health information

Held or transmitted in any form

When would misrepresentation on the insurance application be considered fraud?

If it is intentional and material

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

Who must pay for the cost of a medical examination required in the process of underwriting?

Insurer

What entities make up the Medical Information Bureau?

Insurers

Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decisions of the insurance company, are called

Material Misrepresentation

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Act

Regulates consumer reports

The Federal Fair Credit Reporting Act

If an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation?

The applicant

In comparison to consumer report, which of the following describes a unique characteristic of investigative consumer report?

The customer's associates, friends, and neighbors provide the report's data.

Who must sign a health insurance application?

The policyowner, the insured (if different), and the agent

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage.

When should an agent obtain a Statement of Good Health from the insured?

When premium was paid upon policy delivery and not at the time of application.

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

conditional