Chapter exam- Life Underwriting

Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of:

$10,000

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

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

The application was submitted without the initial premium

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

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

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

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

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T?

Conditional receipt

What action should a producer take if the initial premium is NOT submitted with the application?

Forward the application to the insurer without the initial premium

An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors?

Gender

P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P's coverage becomes effective when

P receives the policy and pays the premium

The underwriting process involves all of these, EXCEPT for:

Policy loan

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

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

applicant