Chapter 1 life insurance

if no receipt is issued at the time of application, a statement of good health is usually required at the time of

application policy delivery policy renewal the paramedics report

which of the following would be the main source of underwriting information used by the compass in the risk selection process

application warranty MIB report attending physicians statement

Representations are statements made by the applicant that are

considered True to the best of the applicants knowledge guaranteed to be true found to be false after further investigation immaterial to the actual acceptability of the insurance contract

what is the main responsibility of a company's underwriting unit

controlling business written by new agents marketing and solicitation of insurance issuing polices risk selection and classification

When must insurable interest exist in life insurance

date if the insured policy delivery date time of claim application date

statements made by an applicant for an insurance policy that are true to the best of the applicants knowledge are referred to as

facts warranties material information representations

Which method of dealing with risk is applied when insurance is purchased

indemnity transfer avoidance sharing

If the agent feels that there could be a misrepresentation on the part of the applicant for insurance, what must the agent do

inform insurance company

Investigative Consumer Reports

information is obtained through investigation and interviews with associates, friends and neighbors of the consumer. Unlike consumer reports, these reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report wad requested. The insurer has 5 days to provide the consumer with additional information an agent who willfully violates this act enough to constitute a general pattern or business practice will be subject to a penalty of up to $2500

Material misrepresentation

is a statement that, if discovered, would alter the underwriting decision of the insurance company.

illustration

not guaranteed and separate from policy. A presentation or depiction that includes non guaranteed elements of a policy of individual group life insurance over a period of years.

How often must organizations consult the national do not call list

once a year every 6 months every 31 days every week

Agents Report

provides the agents personal observations concerning the proposed insured.

If an agent fails to obtain an applicants signature on the insurance application, the agent must

return the application to the applicant for signature

Insurable intrest

to purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of a loss. In life insurance, insurable interest must exist between the policy owner and the insured at the time of application

Conditional receipt

used only when the applicant submits a pre paid application this means the applicant may be covered as early as the date of application

An insured submits the full premium along with a completion of application, and the policy is issued 10 days later. when does the coverage begin

when the policy is received after the free look period one the date of application on the date the policy is issued

Fair Credit Reporting Act

Established procedures that consumer reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used. The law also protects consumers against circulation of inaccurate or obsolete personal or financial information.

Standard Risk

High Risk = High premium rated = high risk

Consumer Reports

Include written and/or oral information regarding a consumers credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.

Preferred

Low risk = Low premium

Standard Risk

Majority/Average risk

Buyers Guide

Provides basic, generic information about life insurance policies that contains, and is limited to, language approved by department of insurance, this document explains how a buyer should go about choosing the amount and type of insurance to buy.

Policy Summary

A written statement describing the features and elements of the policy being issued. It will also include premium, cash value, dividend, surrender value and death benefit figures for a specific policy years. Must be provided when the policy is delivered. provides specific information.

Field Underwriting

Agent that is the company's front line. the agent is usually the one who ha solicited the potential insured. responsibilities such as proper solicitation of applicants helping prevent adverse selection completing the application etc A life insurance producer is the company's field underwriter

Which of the following includes information regarding a persons credit, character, reputation and habits

Agents report MIB report Consumer report fair credit report

Warranty

An absolute true statement upon which the validity of the insurance policy depends.

In life insurance, which of the following is not required to have insurable interest in the insured?

Applicant policy owner insured beneficiary

Required Signatures

Both the agent and the proposed insured(applicant) must sign the application.

Representations

Statements believed to be true to the best of ones knowledge, but they are not guaranteed to be true.

Medical Information Bureau (MIB)

The MIB is a membership corporation owned by member insurance companies. It is a non profit trade organization which receives adverse medical information from insurance companies and maintains confidential medical Impairment information on individuals. The MIB can be used only as an aid in helping insurers know wha areas of impairment they might need to investigate further. Insurers cannot refuse coverage solely on the information on a MIB report.

Underwriting

The risk selection and classification process. It involves a careful analysis of many different factors to determine the acceptability of applicants for insurance.

Investigative Consumer Report

They are general reports of the applicants finances, character, work, hobbies, and habits. Companies that use these reports are subject to the rules and regulations outlined in the Fair Credit Reporting Act.

Which of the following is considered a field underwriter

agent insurer adjuster company underwriter