Insurance exam: Chapter 1 Quiz Questions-Answers

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?

Buyers Guide

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

Fair Credit Reporting Act, all would be considered negative info about a consumer EXCEPT

Disputes regarding consumer report information

who makes up the medical information bureau

Insurers

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

Which is NOT true concerning insurable interest as it applies to life insurance

a debtor has an insurable interest in the life of a lender

in classifying a risk, the home office underwriting department will look at all of the following EXCEPT?

applicants past income

an underwriter may obtain information on an applicants hobbies, financial status, and habits by ordering an

inspection report

What is the purpose of a conditional receipt

it is intended to provide coverage on a date prior to the policy issue

a prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

pay the policy proceeds only if it would have issued the policy

what describes the specific info about a policy?

policy summary

an individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later applicant had to submit to a medical exam. If the policy is issued, what would be the policy effective date?

the date of the medical exam

What is the purpose of the buyers guide?

to allow the consumer to compare the costs of different policies

insured pays $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristics of an insurance contract does this describe?

Aleatory

which best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company

Aleatory

which is the primary source of information used for insurance underwriting?

Application

The Medical Information Bureau (MIB) was created to protect AInsureds from unreasonable underwriting requirements by the insurance companies. BMedical examiners that perform insurance physical examinations. CInsurance companies from adverse selection by high risk persons. DInsurance departments from lawsuits by policyowners.

CInsurance companies from adverse selection by high risk persons.

when an insured makes truthful statements on the application for the insurance and pays the required premium, it is known as which of the following?

Consideration

which is correct about a standard risk classification in the same age group with similar lifestyles?

standard risk is representative of the majority of people

when is the earliest a policy may go into effect?

when the application is signed and a check is given to the agent

If a policy includes a free-look period of at least 10 days, the Buyer's Guide must be delivered to the applicant

with the policy

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's APrior insurance. BAncestry. CCredit history. DHabits.

Ancestory

which of the following is a risk classification used by underwriters for life insurance?

standard

which of the following documents delivered to the policy owner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?

policy summary

If an agent fails to obtain the applicant's signature on the insurance application, what must the insurer do?

return the application to the applicant for a signature

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

unilateral