Chapter 5 Exam life underwriting

A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?

Aviation exclusion

Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine

Probability of making timely premium payments

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?

Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company

Why must an insurance applicant answer all questions on the application?

Statements and representations on the application are part of the consideration for issuing a policy.

K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?

The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured

The reason for backdating a policy is

To obtain a premium rate on an earlier age.

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?

When the conditions of the receipt are met

T cash surrenders a recently-issued whole life policy. He also requests that the proceeds be payable to an unrelated third party. T would likely be red-flagged for violation of

anti-money laundering rules

What is the initial source of underwriting for an insurance policy?

application containing statements from the insured

A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as

A representation

Before a life policy is issued, which of the these contract elements is necessary

A signed application by the prospect

All are true statements regarding the underwriting process, except

AIDS and HIV virus exams can be conducted in a discriminatory fashion.

When an insurance application is taken by a producer, which of these statements is true?

Any changes made on the application require the applicant's initials

on august 6, D submitted an application for a 50,000 life insurance policy and did pay the initial premium. On august 18, D went to his doctor complain of chest pains and some tests given by the doctor. The life policy was delivered by the producer on august 20 and D explains what had recently taken place with the doctor. What action should the producer then make?

Collect initial premium along with a signed health benefit.

T is given a receipt After completing a life insurance application and paying the initial premium. Under this situation, T's coverage is

Conditional, depending on the insurer's underwriting guidelines

D the agent met with a prospect and ended up selling an insurance policy. While filling out the insurance application, D makes a mistake. In this situation, D MUST

Correct the information and have the prospect initial change

A ______ contained in a life insurance policy states that the policy will NOT cover certain risks.

Exclusion

P has recently signed an application for insurance. The insurer MUST advise her in writing that an investigative consumer report may be conducted according to the

Fair credit reporting act

On January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?

January 26

The entity whose sole purpose is sharing medical data among its member companies is called the

Medical information

Which of these do not constitute policy delivery?

Policy issued with a rating

A life insurance application may be rejected on the basis of all of these factors except

gender