Chapter 5 - Life Insurance Underwriting and Policy Issue

Which of these factors do NOT play a role in the underwriting of a life insurance policy?

Marital status

The underwriting process involves all of these. EXCPET for:

Policy Loan

Why is an applicant's signature required on a life insurance application?

To attest that the statements on the application are accurate to the best of the applicants knowledge

When does a life insurance contract become effective if the initial premium is not collected during the application process?

When producer delivers policy and collects initial premium

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?

Risk Classification

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

Any changes made on the application require the applicants initials

What is being delivered during a policy delivery?

Insurance contract to the proposed insured

Which of these do NOT constitute policy delivery?

Policy issued with a rating

What would the Medical Information Bureau (MIB) identify?

Testing positive for marijuana use from a previous screening.

All are true statements regarding the underwriting process, EXCEPT:

AIDS and HIV virus exams can be conducted in a discriminatory fashion. AIDS and HIV testing must be conducted in a uniform fashion and can not be discriminatory.

Who is NOT required to sign a life insurance application?

Beneficiary

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 a policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?

January 26. Coverage becomes effective on the date the policy is delivered and the first premium is collected.

On delivery of a policy, a signed statement of good health is typically requested if:

The application was submitted without the initial premium

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

In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and

the initial premium