Course 6

When an insurance company requests an attending physician's report, the request must be accompanied by a -conditional receipt -buyer's guide -copy of the signed authorization -policy illustration

"copy of the signed authorization". An insurer's request for an attending physician's report must be accompanied by a copy of the signed authorization.

Which of the following types of information is NOT required for a life insurance application? -Health history -Ethnicity -Occupation -Hobbies

"Ethnicity" Ethnicity is not required information needed for a life insurance policy.

The risk selection process is primarily given to which insurance company department? -Administration -Legal -Marketing -Underwriting

"Underwriting". An insurance company's underwriting department is primarily responsible for the risk selection process (which applications are accepted or rejected).

A report which is based on creditworthiness and personal characteristics that influences an insurance applicant's eligibility for life and health insurance is called a(n} -MIB report -consumer report -agent's report -medical report

"consumer report". A consumer report influences an insurance applicant's eligibility for life and health insurance and is based on creditworthiness and personal characteristics

The Medical Information Bureau consists of -insurance agents -health care providers -doctors -life and health insurance companies

"life and health insurance companies". Life and health insurers are members of the Medical Information Bureau.

When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called -issuance -underwriting -regulation -adverse selection

"underwriting". When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called underwriting.

What must an applicant do in order to authorize the release of an attending physician report? -Give verbal consent -Write a letter to the MIB -Sign a consent form -Agree to a physical examination

"Sign a consent form". To authorize the release of an attending physician's report, the applicant must sign a consent form.

Which of the following is NOT a risk classification that an underwriter would use? -Dividend risk -Standard risk -Preferred risk -Substandard risk

"Dividend risk" Underwriters classify insurance risks as all of these EXCEPT "Dividend risk".

How does a conditional receipt differ from a binding receipt? -Conditional receipts always provide insurance which starts from the date of receipt -Binding receipts always require an initial premium payment -Binding receipts always provide insurance which starts from the date of receipt -Conditional receipts always require an initial premium payment

"Binding receipts always provide insurance which starts from the date of receipt". Only a binding receipt always provides insurance that is effective from the date the receipt is given.

Which of the following risk classifications charges the highest premium? -Preferred -Standard -Level -Substandard

"Substandard". A substandard classification charges the highest premium.

What are members of the Medical Information Bureau (MIB) required to report? -The face amount of the policy applied for -The premium of the policy applied for -The underwriting methods used to acquire personal information -Medical ailments discovered during the underwriting process

"Medical ailments discovered during the underwriting process". Members of the Medical Information Bureau are required to report medical impairments found during the underwriting process.

Which of the following risk classifications charges the lowest premium? -Preferred -Standard -Level -Substandard

"Preferred" A preferred classification charges the lowest premium.

An applicant has revealed conditions that require more information. Which of the following is needed next? -Physical examination -Attending physician's statement -Agent's report -Credit report

"Attending physician's statement". An attending physician's statement (APS) is needed in cases in which the individual application and/or medical reports reveal conditions of which more info is required. The applicant must sign a written release to enable a release of the APS

Most U.S. life insurance companies belong to the -Medical Information Bureau -National Association of Insurance Commissioners -Underwriting Information Bureau -FINRA

"Medical Information Bureau" Nearly every life insurer in the United States belongs to the Medical Information Bureau.

Which of the following is NOT an important reason for a life insurance application? -The application identifies who is the applicant, insured, owner, payor, and beneficiary -If the proposed insured is someone other than the applicant, both the proposed insured and the applicant must sign the application -The beneficiary must sign the application before the insurer will issue the policy -Statements made in the application are considered to be representations

"The beneficiary must sign the application before the insurer will issue the policy". A life insurance application is important for all of these reasons EXCEPT "The beneficiary must sign the application before the insurer will issue the policy".

The objective of underwriting is to -assign the highest premium possible -avoid selecting a disproportionate number of good risks -decline as many applications as possible -avoid selecting a disproportionate number of bad risks

"avoid selecting a disproportionate number of bad risks". The goal of underwriting is to avoid selecting a disproportionate number of bad risks.