underwriting insurance and delivery

Which of the following correctly describes the penalty applied to a company for calling a person whose phone number is on the Do Not Call List?

A company that continues to call a consumer on the Do Not Call List may be subject to a penalty fine of $16,000. The correct answer is: Fine in the amount of $16,000

How many months can a life insurance policy be backdated?

A life insurance application can be backdated up to six months. The correct answer is: 6 months

Field underwriting ________ adverse selection.

As field underwriters, agents help reduce the chance of adverse selection. Adverse selection cannot be completely eliminated by field underwriting; however, it reduces the chance of adverse selection. The correct answer is: Reduces

Coverage is effective:

Coverage is effective with collection of the initial premium, approval of the application, and policy issuance and delivery. If the initial premium does not accompany the application, the premium must be collected by the agent. In some cases, the insurer requires the agent to collect a statement of good health from the insured at the time of delivery. If the initial premium is not submitted with the application, the policy effective date is established by the insurer. In this case, it could be the date of policy issuance, or the date the policy is delivered to the applicant, premium collected, and statement of continued good health signed. The correct answer is: With collection of the initial premium, approval of the application, policy issuance and delivery

Dale fills out a health insurance policy application, and hands it to his agent. Of the following statements, which is correct?

Dale did not receive interim coverage, so his policy is considered in force when the agent delivers the policy and Dale has paid the initial premium. The correct answer is: Dale's policy is in force when the agent deliver's Dale's policy.

David signs an application for a $50,000 life policy, pays the initial premium, and receives a conditional receipt. If he were killed in an automobile accident one day later:

If David qualifies for coverage, he is immediately insured at the time of application if he pays the initial premium and receives a conditional receipt. IF his application is approved by underwriters _ that is, if he qualified for the policy, his beneficiary would receive the $50,000. The correct answer is: His beneficiary would receive $50,000, if the application qualified him for the policy for which he applied.

Marge and Ben purchase a comprehensive major medical policy to cover their family. Who is required to sign the application?

Marge and Ben are the applicants for health coverage. Their signatures are required on the application. Minor children do not sign the application. The correct answer is: Marge and Ben

money laundering?

Money laundering includes financial transactions made in the U.S. for committing violent crimes, bribery of public officials, fraudulent use of public funds, smuggling, illegal exportation of controlled munitions, importation of firearms/ammunition not authorized in the U.S., smuggling of any item controlled under export laws, and computer crimes. The correct answer is: All of the above

At what age may a minor purchase a life or health insurance contract?

Once a minor reaches the age of 15, they may purchase a life or health insurance policy. The correct answer is: 15

Telemarketers may call phone numbers not on the Do Not Call List from:

Telemarketers may call phone numbers not placed on the Do Not Call List from 8am _ 9pm. The correct answer is: 8am to 9pm

Who administers the National Do Not Call Registry?

The Federal Trade Commission (FTC) administers the National Do Not Call List. The correct answer is: The Federal Trade Commission

The agent must provide the buyer's guide to the applicant:

The buyer's guide must be provided by law to the applicant at policy delivery. The correct answer is: When the policy is delivered

If a premium payment has not been given with the application, the policy becomes effective only when the producer delivers the policy and:

When the initial premium has not been paid at the time of application, in addition to other delivery requirements, the producer must obtain a statement of continued good health with the first premium. The signed application must be submitted at the time of the application, not when the policy is delivered. The correct answer is: Explains its provisions, secures the initial premium, and a signed statement of continued good health

If a company issues a conditional receipt to an applicant who has paid an initial premium for a policy that does not require a medical examination:

A conditional receipt is given when the applicant pays the first premium at the time they sign the policy application. A conditional receipt covers the applicant immediately from the date of application, providing that their application passes the underwriting requirements for the policy. Thus, the applicant is covered at the present time. If a medical examination is required, coverage begins after the applicant passes the medical examination. The correct answer is: The applicant is immediately covered.

All of the following correctly demonstrate policy delivery, EXCEPT:

A policy is not considered to be _delivered_ when the application is approved by the underwriter. The correct answer is: The application is approved by the underwriter

Which of the following does not demonstrate constructive delivery?

Constructive delivery occurs when the insurer divests all control over the policy to the policyowner. Delivery has not occurred when the agent issues a conditional receipt. The correct answer is: A conditional receipt is issued to the applicant

If required by the insurer, the statement of good health must be collected by the producer at the time of:

The agent collects the statement of good health upon policy delivery. If the agent notices the insured's health has worsened, the policy should not be delivered. The correct answer is: Policy delivery

Which of the following statements about a temporary insurance agreement is CORRECT?

Your answer is correct A temporary insurance agreement is just that: temporary coverage until an application is rejected or the policy is issued. The correct answer is: It provides temporary coverage until an application is rejected or the policy is issued.

Sam submits an application with initial premium for a life insurance policy on July 6th. The agent issues Sam a conditional receipt at this time. Sam takes the required medical exam on July 10th. The insurer approves the policy on August 1st, and the agent delivers the policy to Sam on August 10th. Which day did Sam's coverage begin?

Coverage begins at the later of the conditional receipt or medical exam. In this case, July 10th. The correct answer is: July 10th

All of the following statements are true regarding insurance application procedures, EXCEPT:

The application is one of the key sources used by underwriters to collect information and establish insurability. In many states the application becomes part of the insurance contract. For this reason, the producer is responsible for making sure that the applicant has completely filled out the application, and all signatures have been obtained. Producers cannot make any changes in the application. Instead, the producer should notify the applicant of the missing information, and have the applicant fill in the required information. The correct answer is: Producers can fill in any missing information they discover on the application.

Margaret makes a change to her health insurance application after completing it. Who must initial her change and sign the contract?

Any changes made to an insurance application after the application is completed must be initialed by the applicant. In order for the changes to be valid, the contract must then be signed by the applicant and the agent. The correct answer is: Margaret

Anna applied for a $1 million life insurance policy and paid the first premium. Later she was declared uninsurable. Her agent gave her a receipt that guarantees coverage until the insurer formally rejects the application. Which type of receipt did Anna receive?

With a binding receipt, coverage is assured, even if the person is later proved to be uninsurable, until the insurer formally rejects the application. The correct answer is: Binding

Both the producer and the ___________ are required to sign the insurance application.

The applicant must sign the application. In cases where the insured is a minor, the insured will not sign the application. If the insured is someone other than the applicant, and is not a minor child, they will be required to sign the application. The beneficiary is not required to sign the application. the answer: applicant

In Ray's application for life insurance an applicant failed to complete one part regarding family history. In his statement, the agent described the family as long-lived and healthy. If an insurance company accepts the application in the incomplete form and the applicant for coverage dies young from a cardiac condition that had taken the lives of both his parents before age 50, will the company deny or accept the claim of the beneficiaries?

If a company accepts an incomplete application, in the event of a claim, the company cannot deny that claim based on missing information in the application. By accepting the application, it waived its right to the missing information. The correct answer is: It will pay the claim, because in accepting the application, it waived its right to the missing information.

Wesley fills out an application for a life insurance policy and submits it to the agent on January 5th. He does not include the first premium payment. Wesley undergoes the required medical examination on January 7th. The insurance company approves Wesley's application on January 15th. Wesley's agent delivers the policy to Wesley on January 17th. At this time, Wesley writes out a check for the initial premium. On what date is Wesley's policy effective?

If the initial premium is not submitted with the application, the policy effective date is the date on which the policy is delivered, and the initial premium is paid. In this example, January 17th. The correct answer is: January 17th

An individual signed an application for a $100,000 life insurance policy and paid the first premium on January 1. The agent issued an insurability receipt. A week later, the required medical examination proves the person insurable. If the person dies before the insurer approves the application:

If the person pays the premium, receives an insurability receipt, and proves to be insurable, coverage will be effective retroactively. As a result, the beneficiary will receive the $100,000 death benefit. The correct answer is: The coverage will be retroactively effective.

A life insurance application can usually be backdated for a maximum of how many months?

In most states, a life insurance application can be backdated up to six months. The correct answer is: 6 months

Alexander's life insurance policy is rated. Of the following, who must explain the reason for the premium increase to Alexander?

The agent is responsible for explaining any changes in coverage to the applicant. The correct answer is: The agent

Coverage begins on the application date or date of medical exam for which of the following?

With the insurability receipt coverage begins on the application date or date of medical exam. The correct answer is: Insurability receipt