Chapter 5

under the USA patriot act, insurers are required to report receipt of cash payments in excess of

$10,000

Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?

policy was returned within the free-look period, premium will be fully refunded

a medical information report (MIB) report may disclose which of the following

prior use of marijuana

all of these are considered sources of underwriting information about an applicant, EXCEPT

rating services

what is the purpose of a policy summary

It highlights the critical parts of the policy issued

what is the purpose of the USA patriot act

detect and deter terrorism

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

marital status

which of the following statements is correct about an agent who is taking an insurance application

the agent should have the applicant initial any changes made on the application

information obtained from a phone conversation to the proposed insured can be found in which of these reports

inspection report

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n)

anti-money laundering violation

the underwriting process involves all of these EXCEPT 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 applicant's knowledge

Which parts of a life insurance policy are guaranteed to be true?

warranty

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

Any changes made on an insurance application requires the initials of whom?

applicant

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the

applicant's physician

before a life insurance policy is issued, which of these components of the contract is required

applicant's signature on application

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

aviation exclusion

on august 6, D submitted an application for a $50,000 life insurance policy and did not pay the initial premium. on august 18, D went to his doctor complaining of chest pains and some tests were 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 take

collect initial premium along with a signed health statement

which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy

complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

conditional

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?

fair credit reporting act

from what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant

fair credit reporting act

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

free-look period has expired

Which of these actions should a producer take when submitting an insurance application to an insurer?

inform insurer of relevant information not included on the application

Which of these do NOT constitute policy delivery?

policy issued with a rating

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

which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant

risk classification

P is a producer who notices 5 questions on a life application were not answered. What actions should P take?

set up a meeting with the applicant to answer the remaining questions

What would the Medical Information Bureau (MIB) identify?

testing positive for marijuana use from a previous screening

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