Completing the Application, Underwriting, and Delivering the Policy

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 Stoli policy (Stranger originated life insurance policies are usually purchased by people who have no relationship with the insured with the intention of selling them for life settlements.

Agent/producer

A legal rep of an insurance company, the classification of producer usually includes agents and brokersf

Applicant or proposed insured

A person applying for insurance

Insured

A person covered by an insurance policy

Beneficiary

A person who receives the benefits of an insurance policy

The term illustration in a life insurance policy refers to

A presentation of nonguartanteed elements of a policy

Which of the following reports will provide the underwriter with the information about an insurance applicant;s credit?

Consumer report

The MIB was created to protect

Insurance companies from adverse selection by high risk persons.

Adverse selection

Insuring of risks that are more prone to losses than the average risk

Fraud

Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.

An applicant who receives a preferred risk classification qualifies for

Lower premiums than a person who receives a standard risk.

What is the major difference between a stock company and a mutual company?

Ownership Mutual companies are owned by policyholders, while stock companies are owned by stockholders.

Under the Fair credit reporting act, if the consumer challenges the accuracy of the info what does the company have to do ?

Respond to the consumer's complaint

Insurer

The company or agency that writes an insurance policy

If an insurer requires a medicinal exam who's pays it?

The insurer

Insurance policy

a written contract between the insured and an insurance company that promises to pay for all or part of a loss

Life insurance

coverage on human lives

Lapse

policy termination due to nonpayment of premium

Premium

the money paid to the insurance company for the insurance policy

Policyowner

the person entitled to exercise the rights and privileges in the policy

Which of the following is a statement that is guaranteed to be true, and if untrue may breach an insurance contract?

warranty