Colorado Life - Completing the Application, Underwriting, and Delivering the Policy
What is the purpose of a conditional receipt? A) It serves as proof that the applicant has been determined insurable. B) It is given only to applicants who fully prepay the premium. C) It is intended to provide coverage on a date prior to the policy issue. D) It guarantees that a policy will be issued in the amount applied for.
C) It is intended to provide coverage on a date prior to the policy issue.
If a change needs to be made to the ___, the agent may do all of the following - Draw a line through the first answer, record the correct answer, and have the applicant initial the change. - Note on the application the reason for the change. - Destroy the application and complete a new one.
application for insurance
An illustration may not be altered by an agent and ___. It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values.
must clearly state that it is not part of the contract
Upon ___, the producer may be required to obtain any of the following - Statement of good health. - Delivery receipt.
policy delivery
Which of the following is NOT the consideration in a policy? (2) A) The application given to a prospective insured B) Something of value exchanged between parties C) The premium amount paid at the time of application D) The promise to pay covered losses
A) The application given to a prospective insured
How is it determined whether an insurer is allowed to write business in a state? A) The insurer's domicile or location of incorporation will determine whether a company is domestic, foreign, or alien. B) The insurer's domicile will determine whether an insurance company is domestic, foreign, or alien. C) The insurer's location of incorporation will determine whether a company is domestic, foreign, or alien. D) The insurer's net income will determine whether a company will be allowed to write business in a state.
A) The insurer's domicile or location of incorporation will determine whether a company is domestic, foreign, or alien.
What is the timeframe for filing relevant Suspicious Activity Reports? A) Within 90 days of the suspicious transaction B) Within 30 days of initial discovery C) Within 30 days of the suspicious transaction D) Within 90 days of initial discovery
B) Within 30 days of initial discovery
In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT A) Applicant's present physical condition. B) Applicant's present occupation. C) Applicant's past income. D) Applicant's past medical history.
C) Applicant's past income.
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT (2) A) Legal purpose. B) Offer and acceptance. C) Conditions. D) Consideration.
C) Conditions.
The term "illustration" in a life insurance policy refers to A) A depiction of policy benefits and guarantees. B) Pictures accompanying a policy. C) Charts and graphs. D) A presentation of nonguaranteed elements of a policy.
D) A presentation of nonguaranteed elements of a policy.
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe? A) Contingent B) Aleatory C) Unilateral D) Conditional
D) Conditional
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report A) Are entitled to obtain a copy of the report from the party who ordered it. B) Must be advised that a copy of the report is available to anyone who requests it. C) May sue the reporting agency in order to get inaccurate data corrected. D) Must be informed of the source of the report.
D) Must be informed of the source of the report.
Which of the following is NOT the consideration in a policy? A) The application given to a prospective insured B) Something of value exchanged between parties C) The premium amount paid at the time of application D) The promise to pay covered losses
A) The application given to a prospective insured
Which of the following is the basic source of information used by the company in the risk selection process? A) Consumer report B) Application C) Agent's report D) Warranty
B) Application
Which of the following individuals must have insurable interest in the insured? A) Producer B) Policyowner C) Beneficiary D) Underwriter
B) Policyowner
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? A) 10 days B) 3 days C) 5 days D) 7 days
C) 5 days
Another name for a substandard risk classification is A) Controlled. B) Declined. C) Elevated. D) Rated.
D) Rated.
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles? A) Standard risk pays a higher premium than a substandard risk. B) Standard risk requires extra rating. C) Standard risk is also known as high exposure risk. D) Standard risk is representative of the majority of people.
D) Standard risk is representative of the majority of people.
All of the following are requirements for life insurance illustrations EXCEPT A) They may only be used as approved. B) They must identify nonguaranteed values. C) They must differentiate between guaranteed and projected amounts. D) They must be part of the contract.
D) They must be part of the contract.
The following is the ___ (2) - Something of value exchanged between parties - The premium amount paid at the time of application - The promise to pay covered losses
consideration in a policy (2)
If an insurance company wishes to order a ___, and if a notice of insurance information practices has been provided, the report may contain all of the following information - Habits. - Prior insurance. - Credit history.
consumer report on an applicant to assist in the underwriting process
All of the following are requirements for ___ - They must differentiate between guaranteed and projected amounts. - They may only be used as approved. - They must identify nonguaranteed values.
life insurance illustrations
An insurance contract must contain all of the following to be considered legally binding EXCEPT A) Consideration. B) Competent parties. C) Beneficiary's consent. D) Offer and acceptance.
C) Beneficiary's consent.
An insurance contract must contain all of the following to be considered legally binding EXCEPT (2) A) Consideration. B) Competent parties. C) Beneficiary's consent. D) Offer and acceptance.
C) Beneficiary's consent. (2)
Which of the following will be included in a policy summary? (2) A) Comparisons with similar policies B) Primary and secondary beneficiary designations C) Premium amounts and surrender values D) Copies of illustrations and application
C) Premium amounts and surrender values (2)
The following information about the applicant is included in the ___ of the application for insurance - Gender - Occupation - Marital status
General Information section
The term "illustration" in a life insurance policy refers to A) A presentation of nonguaranteed elements of a policy. B) A depiction of policy benefits and guarantees. C) Pictures accompanying a policy. D) Charts and graphs.
A) A presentation of nonguaranteed elements of a policy.
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? A) Conditional B) Adhesion C) Personal D) Unilateral
A) Conditional
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is A) Conditional. B) Aleatory. C) Personal. D) Unilateral.
A) Conditional.
In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT A) Applicant's present occupation. B) Applicant's past income. C) Applicant's past medical history. D) Applicant's present physical condition.
B) Applicant's past income.
___ are part of the policy structure. Consideration is an essential part of a contract.
Conditions (3)
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will A) Automatically pay the policy proceeds. B) Pay the policy proceeds only if it would have issued the policy. C) Pay the policy proceeds up to an established limit. D) Not pay the policy proceeds under any circumstances.
B) Pay the policy proceeds only if it would have issued the policy.
An insurance contract must contain all of the following to be considered ___ - Consideration. - Competent parties. - Offer and acceptance.
legally binding
What is the purpose of a conditional receipt? A) It is given only to applicants who fully prepay the premium. B) It is intended to provide coverage on a date prior to the policy issue. C) It guarantees that a policy will be issued in the amount applied for. D) It serves as proof that the applicant has been determined insurable.
B) It is intended to provide coverage on a date prior to the policy issue.
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's A) Habits. B) Prior insurance. C) Ancestry. D) Credit history.
C) Ancestry.
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? (2) A) As of the policy delivery date B) As of the first of the month after the policy issue C) As of the policy issue date D) As of the application date
D) As of the application date (2)
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process? A) Insurance Index B) Policy Summary C) Illustrations D) Buyer's Guide
D) Buyer's Guide
Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives? A) Inspection Report B) Agent's Report C) General Information D) Medical Information
D) Medical Information
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? A) The policy will be interpreted as if the insured did not have an answer to the question. B) The policy will be void. C) The insurer may deny coverage later, because of the information missing on the application. D) The policy will be interpreted as if the insurer waived its right to have an answer on the application.
D) The policy will be interpreted as if the insurer waived its right to have an answer on the application.
What is the purpose of the buyer's guide? A) To provide the name and address of the agent/producer issuing the policy B) To list all policy riders C) To provide information about the issued policy D) To allow the consumer to compare the costs of different policies
D) To allow the consumer to compare the costs of different policies
Because an insurance policy is a legal contract, it must conform to the ___ which require all of the following elements - Consideration. - Legal purpose. - Offer and acceptance.
state laws governing contracts
Because an insurance policy is a legal contract, it must conform to the ___ which require all of the following elements - Legal purpose. - Offer and acceptance. - Consideration.
state laws governing contracts
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT A) Conditions. B) Consideration. C) Legal purpose. D) Offer and acceptance.
A) Conditions.
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as A) Contracts of adhesion. B) Unilateral contracts. C) Aleatory contracts. D) Binding contracts.
A) Contracts of adhesion.
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT A) Signed waiver of premium. B) Statement of good health. C) Payment of premium. D) Delivery receipt.
A) Signed waiver of premium.
Which of the following best describes the MIB? A) It is a rating organization for health insurance. B) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. C) It is a government agency that collects medical information on the insured from the insurance companies. D) It is a member organization that protects insured against insolvent insurers.
B) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe? A) Unilateral B) Conditional C) Personal D) Adhesion
D) Adhesion
What is the major difference between a stock company and a mutual company? A) Ownership B) Amount of benefits C) Number of producers D) Types of policies issued
A) Ownership
When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information? A) Medical records B) Application C) Interviews D) State records
B) Application
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as A) Binding contracts. B) Contracts of adhesion. C) Unilateral contracts. D) Aleatory contracts.
B) Contracts of adhesion.
An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n) A) Attending Physician Statement. B) Inspection report. C) Medical Information Bureau report. D) Medical examination.
B) Inspection report.
In forming an insurance contract, when does acceptance usually occur? A) When an insured submits an application B) When an insurer's underwriter approves coverage C) When an insurer delivers the policy D) When an insurer receives an application
B) When an insurer's underwriter approves coverage
An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n) A) Inspection report. B) Medical Information Bureau report. C) Medical examination. D) Attending Physician Statement.
A) Inspection report.
The following are the ___ - Something of value exchanged between parties - The premium amount paid at the time of application - The promise to pay covered losses
consideration in a policy
If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT A) Erase the incorrect answer and record the correct answer. B) Draw a line through the first answer, record the correct answer, and have the applicant initial the change. C) Note on the application the reason for the change. D) Destroy the application and complete a new one.
A) Erase the incorrect answer and record the correct answer.
Which of the following best describes the MIB? A) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. B) It is a government agency that collects medical information on the insured from the insurance companies. C) It is a member organization that protects insured against insolvent insurers. D) It is a rating organization for health insurance.
A) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
Which of the following best details the underwriting process for life insurance? A) Selection, classification, and rating of risks B) Solicitation, negotiation and sale of policies C) Issuance of policies D) Reporting and rejection of risks
A) Selection, classification, and rating of risks
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than A) With the policy. B) Upon issuance of the policy. C) Within 30 days after the first premium payment was collected. D) Prior to filling out an application for insurance.
A) With the policy.
Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a A) Warranty. B) Premium receipt. C) Statement of good health. D) Backdated receipt.
B) Premium receipt.
All of the following are requirements for life insurance illustrations EXCEPT (2) A) They must differentiate between guaranteed and projected amounts. B) They must be part of the contract. C) They may only be used as approved. D) They must identify nonguaranteed values.
B) They must be part of the contract.
The Gramm-Leach-Bliley Act was passed to A) Allow consumers access to credit and private consumer reports. B) Allow insurance companies access to medical information for underwriting purposes. C) Protect private customer information filed with a financial institution. D) Define insurance as interstate commerce.
C) Protect private customer information filed with a financial institution.
Which of the following information about the applicant is NOT included in the General Information section of the application for insurance? A) Gender B) Occupation C) Marital status D) Medical background
D) Medical background
An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is TRUE? A) The premium would be returned to the insured's estate because the policy was not issued. B) The death claim will be rejected. C) The application will be voided. D) The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.
D) The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.
Because an insurance policy is a legal contract, it must ___ which require all of the following elements - Legal purpose. - Offer and acceptance. - Consideration.
conform to the state laws governing contracts
The following is the ___ - Something of value exchanged between parties - The premium amount paid at the time of application - The promise to pay covered losses
consideration in a policy
All of the following are requirements for ___ - They must differentiate between guaranteed and projected amounts. - They may only be used as approved. - They must identify nonguaranteed values.
life insurance illustrations
As a field underwriter, a ___ all of the following tasks - Obtain appropriate signatures on the application for insurance. - Help prevent adverse selection. - Solicit business that will fall within the insurer's underwriting guidelines.
producer is responsible for
In classifying a risk, the ___ will look at all of the following - Applicant's present occupation. - Applicant's past medical history. - Applicant's present physical condition.
Home Office underwriting department
What is the purpose of a conditional receipt? A) It is intended to provide coverage on a date prior to the policy issue. B) It guarantees that a policy will be issued in the amount applied for. C) It serves as proof that the applicant has been determined insurable. D) It is given only to applicants who fully prepay the premium.
A) It is intended to provide coverage on a date prior to the policy issue.
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe? A) Aleatory B) Unilateral C) Conditional D) Contingent
C) Conditional
As a ___, a producer is responsible for all of the following tasks - Help prevent adverse selection. - Solicit business that will fall within the insurer's underwriting guidelines. - Obtain appropriate signatures on the application for insurance.
field underwriter
All of the following are requirements for life insurance illustrations EXCEPT A) They must differentiate between guaranteed and projected amounts. B) They must be part of the contract. C) They may only be used as approved. D) They must identify nonguaranteed values.
B) They must be part of the contract.
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT A) Legal purpose. B) Offer and acceptance. C) Conditions. D) Consideration.
C) Conditions.
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will A) Issue the policy anyway and pay the face value to the beneficiary. B) Negotiate a reduced settlement with the beneficiary due to the unusual circumstances involved. C) Return the premium to Y's estate, since it has no obligation to pay the death claim. D) Keep the premium and reject the risk on the basis that the applicant died before the policy could be issued.
A) Issue the policy anyway and pay the face value to the beneficiary.
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? A) The insurer may deny coverage later, because of the information missing on the application. B) The policy will be interpreted as if the insurer waived its right to have an answer on the application. C) The policy will be interpreted as if the insured did not have an answer to the question. D) The policy will be void.
B) The policy will be interpreted as if the insurer waived its right to have an answer on the application.
Which of the following best describes the aleatory nature of an insurance contract? A) Ambiguities are interpreted in favor of the insured B) Policies are submitted to the insurer on a take-it-or-leave-it basis C) Exchange of unequal values D) Only one of the parties being legally bound by the contract
C) Exchange of unequal values
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about A) Which individual will pay the premium. B) Whether an insurable interest exists between the individuals. C) The gender of the applicant. D) The type of policy requested.
B) Whether an insurable interest exists between the individuals.
Which of the following is NOT the consideration in a policy? (2) A) The application given to a prospective insured B) Something of value exchanged between parties C) The premium amount paid at the time of application D) The promise to pay covered losses
A) The application given to a prospective insured
Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years? A) A notice regarding replacement B) A privacy notice C) A buyer's guide D) A policy summary
D) A policy summary
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an A) Certified insurer. B) Self-insurer. C) Authorized insurer. D) Local insurer.
C) Authorized insurer.
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of A) A prearranged funeral plan. B) A viatical settlement. C) Third-party ownership. D) A STOLI policy.
D) A STOLI policy.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? A) The customer has no knowledge of this action. B) The customer's associates, friends, and neighbors provide the report's data. C) They provide additional information from an outside source about a particular risk. D) They provide information about a customer's character and reputation.
B) The customer's associates, friends, and neighbors provide the report's data.
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? A) Conditional B) Unilateral C) Unidirectional D) Aleatory
B) Unilateral
As a field underwriter, a producer is responsible for all of the following tasks EXCEPT A) Help prevent adverse selection. B) Solicit business that will fall within the insurer's underwriting guidelines. C) Obtain appropriate signatures on the application for insurance. D) Issue the policy that is requested.
D) Issue the policy that is requested.
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? A) When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health B) On the designated effective date C) On the application date D) When the agent submits the application to the company and the company issues a conditional receipt
A) When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
As a field underwriter, a producer is responsible for all of the following tasks EXCEPT A) Obtain appropriate signatures on the application for insurance. B) Issue the policy that is requested. C) Help prevent adverse selection. D) Solicit business that will fall within the insurer's underwriting guidelines.
B) Issue the policy that is requested.
When is the earliest a policy may go into effect? A) After the underwriter reviews the policy B) When the application is signed and a check is given to the agent C) When the first premium is paid and the policy has been delivered D) When the insurer approves the application
B) When the application is signed and a check is given to the agent
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? A) 3 days B) 5 days C) 10 days D) 14 days
A) 3 days
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it? A) A legal (but unethical) contract B) Unilateral C) Adhesion D) Conditional
B) Unilateral
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report A) Must be advised that a copy of the report is available to anyone who requests it. B) May sue the reporting agency in order to get inaccurate data corrected. C) Must be informed of the source of the report. D) Are entitled to obtain a copy of the report from the party who ordered it.
C) Must be informed of the source of the report.
Which of the following will be included in a policy summary? A) Comparisons with similar policies B) Primary and secondary beneficiary designations C) Premium amounts and surrender values D) Copies of illustrations and application
C) Premium amounts and surrender values
The following statements is true concerning ___ as it applies to life insurance - Business partners have an insurable interest in each other. - A married person has an insurable interest in their spouse. - An individual has an insurable interest in their own life.
insurable interest
What is the purpose of the buyer's guide? A) To list all policy riders B) To provide information about the issued policy C) To allow the consumer to compare the costs of different policies D) To provide the name and address of the agent/producer issuing the policy
C) To allow the consumer to compare the costs of different policies
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? (2) A) 10 days B) 3 days C) 5 days D) 7 days
C) 5 days (2)
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be A) Qualified. B) Approved. C) Authorized. D) Certified.
C) Authorized.
The Medical Information Bureau (MIB) was created to protect A) Insureds from unreasonable underwriting requirements by the insurance companies. B) Medical examiners that perform insurance physical examinations. C) Insurance companies from adverse selection by high risk persons. D) Insurance departments from lawsuits by policyowners.
C) Insurance companies from adverse selection by high risk persons.
In insurance, an offer is usually made when A) An applicant submits an application to the insurer. B) The insurer approves the application and receives the initial premium. C) The agent hands the policy to the policyholder. D) An agent explains a policy to a potential applicant.
A) An applicant submits an application to the insurer.
What is the purpose of a disclosure statement in life insurance policies? A) To explain features and benefits of a proposed policy to the consumer B) To obtain important underwriting information from the applicant C) To help consumers compare policy prices D) To protect agents and insurers against lawsuits
A) To explain features and benefits of a proposed policy to the consumer
Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must A) Send an actual certified copy of the entire report to the consumer. B) Respond to the consumer's complaint. C) Defend the report if the agency feels it is accurate. D) Change the report.
B) Respond to the consumer's complaint.
How is it determined whether an insurer is allowed to write business in a state? A) The insurer's net income will determine whether a company will be allowed to write business in a state. B) The insurer's domicile or location of incorporation will determine whether a company is domestic, foreign, or alien. C) The insurer's domicile will determine whether an insurance company is domestic, foreign, or alien. D) The insurer's location of incorporation will determine whether a company is domestic, foreign, or alien.
B) The insurer's domicile or location of incorporation will determine whether a company is domestic, foreign, or alien.
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance? A) Business partners have an insurable interest in each other. B) A married person has an insurable interest in their spouse. C) An individual has an insurable interest in their own life. D) A debtor has an insurable interest in the life of a lender.
D) A debtor has an insurable interest in the life of a lender.
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? A) As of the policy delivery date B) As of the first of the month after the policy issue C) As of the policy issue date D) As of the application date
D) As of the application date
Who makes up the Medical Information Bureau? A) Hospitals B) Former insured C) Physicians and paramedics D) Insurers
D) Insurers
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will A) Negotiate a reduced settlement with the beneficiary due to the unusual circumstances involved. B) Return the premium to Y's estate, since it has no obligation to pay the death claim. C) Keep the premium and reject the risk on the basis that the applicant died before the policy could be issued. D) Issue the policy anyway and pay the face value to the beneficiary.
D) Issue the policy anyway and pay the face value to the beneficiary.
A participating insurance policy may do which of the following? A) Provide group coverage B) Pay dividends to the stockholder C) Require 80% participation D) Pay dividends to the policyowner
D) Pay dividends to the policyowner
Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application? A) Issue a policy anyway since the application has been submitted B) Ask the producer who solicited the policy to complete and resign the application C) Fill in the blanks to the best of the insurer's knowledge D) Return the application to the applicant for completion
D) Return the application to the applicant for completion
Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application? (2) A) Issue a policy anyway since the application has been submitted B) Ask the producer who solicited the policy to complete and resign the application C) Fill in the blanks to the best of the insurer's knowledge D) Return the application to the applicant for completion
D) Return the application to the applicant for completion (2)
Which of the following is a risk classification used by underwriters for life insurance? A) Poor B) Normal C) Excellent D) Standard
D) Standard
Which of the following would provide an underwriter with information concerning an applicant's health history? A) A medical examination B) The agent's report C) The inspection report D) The Medical Information Bureau
D) The Medical Information Bureau
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? A) The date of policy delivery B) The date of issue C) The date of application D) The date of medical exam
D) The date of medical exam
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? (2) A) The date of policy delivery B) The date of issue C) The date of application D) The date of medical exam
D) The date of medical exam (2)
Which is generally true regarding insureds who have been classified as preferred risks? A) They can borrow higher amounts off of their policies. B) They can decide when to pay their monthly premiums. C) They keep a higher percentage of any interest earned on their policies. D) Their premiums are lower.
D) Their premiums are lower.
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? A) On the designated effective date B) On the application date C) When the agent submits the application to the company and the company issues a conditional receipt D) When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
D) When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
In classifying a risk, the ___ will look at all of the following - Applicant's present physical condition. - Applicant's present occupation. - Applicant's past medical history.
Home Office underwriting department
