Chapter Exam - Life Underwriting

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

Aviation Exclusion (A student pilot can pay standard premium cost for her life insurance policy with the addition of an aviation.)

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 beginnings immediately if the application is approved. What kind of receipt was used?

Conditional (receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.)

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 (In this situation, the producer should submit the application to the insurance company without the premium. However, if a premium is not paid with the application, the policy will not become valid until the initial premium is collected.)

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

Gender (An insurance company may NOT reject a prospective insured's life application on the basis of gender)

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

Inform insurer of relevant information not included on the application (One of the actions a producer should take when submitting an application is to advise the insurer of any other relevant information not contained in the application.)

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 (An agent who is taking an insurance application should have the applicant initial any changes made on the application.)

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 (insurance becomes effective on delivery of policy to the insured and payment of the initial premium to the producer.)

Q applied for life insurance and summited 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. (The free-look period begins when the policy is delivered to policyowner.)

A Medical Information Report (MIB) report may disclose which of the following:

Prior use of Marjuana (A Medical Information Report (MIB) may disclose lifestyle habits such as drugs, drinking, overeating and smoking.)

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

Rating Services (All of these are valid sources to obtain underwriting information about an applicant EXCEPT for a rating service (A.M. Best, standard & poor's)

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 (Coverage begins on the day in which the producer collects the initial premium and has the applicant sign the life insurance contract.)

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. Assuming that T is an acceptable risk, what item is given to T?

Conditional receipt A conditional receipt binds the insurer to coverage as the date of the application or medical exam, provided the proposed insured is determined to be an acceptable risk.

Agent J take an application and initial premium from an applicant and send 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 the insurance company, and send the new check out to the insurance company. (If an agent receives a check made out to them instead of the insurance company, they should return the check to the customer and collect a new check properly made out to the insurance company.)

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 (An applicant's signature represents that the statements on the application are true to the best of the applicant's knowledge)

Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT:

signed HIPPA disclosure (Upon delivery of a rated life insurance policy, the producer must obtain all of these EXCEPT a "signed HIPAA disclosure". The HIPA disclosure should be taken at the time of sale with the application.)