life + health underwriting quiz

During the underwriting process, an insurer may do all of the following EXCEPT A)verify the applicant's military records, if any B)order a credit report C)order a consumer report to provide details on the applicant's reputation, character, and habits D)contact the Medical Information Bureau to check on the applicant's medical history

A)verify the applicant's military records, if any

A Notice to Applicant must be issued to the consumer no later than A)3 days after the policy has been issued B)3 days after paying the initial premium C)3 days after the report was requested D)3 days after completing the application

C)3 days after the report was requested

Coverage for a health insurance policy will take effect just as if the policy had already been issued if all of the following conditions have been met EXCEPT A)the applicant satisfies all of the conditions of the conditional receipt B)the initial premium was paid with the health application C)the policy has been legally delivered to the applicant D)the policy is eventually issued as applied for

C)the policy has been legally delivered to the applicant

A consumer may make a written request for complete disclosure of the nature and scope of an investigative report regarding her credit history. The disclosure must be made within A)5 days B)15 days C)10 days D)30 days

A)5 days

If the first premium was not paid at the time of application, what must the producer also collect? A)A signed statement of good health B)Medical records C)Referrals D)Results from the paramedic's visit

A)A signed statement of good health

What kind of policy will protect an insurance agent against liability arising out of acts committed in her professional capacity? A)Errors and omissions B)Indemnity C)Contractual liability D)General liability

A)Errors and omissions

With regard to substandard life insurance risks, which of the following statements is CORRECT? A)When the applicant represents a substandard risk, the policy may be modified to reduce the benefits provided. B)An applicant can be deemed a substandard risk based on physical condition only; no other criteria may be considered. C)Because of stringent underwriting requirements, most life insurance applicants are classified as substandard risks. D)To provide coverage to substandard risks, insurers are allowed to charge an extra premium; however, they cannot alter benefit periods or waiting periods.

A)When the applicant represents a substandard risk, the policy may be modified to reduce the benefits provided.

What is the purpose of the Fair Credit Reporting Act? A)It guarantees that credit reports will remain confidential and not accessible to businesses that do not sell insurance. B)It requires consumer report agencies to adopt reasonable procedures when exchanging credit information. C)It prohibits insurance companies from obtaining reports on applicants from investigative agencies. D)It protects credit companies during the course of their investigations.

B)It requires consumer report agencies to adopt reasonable procedures when exchanging credit information.

Which of the following statements regarding how to fix a mistake in an insurance application is NOT correct? A)If the insurer discovers a mistake, it usually returns the application to the agent who, with the applicant, corrects the application. B)Under no circumstances may an agent correct information on an insurance application once it has been completed by the applicant. C)If the insurer discovers an incorrect application before the policy is issued, the insurer may cancel the contract. D)If the agent fixes the mistake in the application, the applicant must initial the correction.

B)Under no circumstances may an agent correct information on an insurance application once it has been completed by the applicant.

Underwriting is a process of A)selecting and marketing policies B)selecting, classifying, and rating risks C)selecting, reporting, and rejecting risks D)determining and establishing premiums

B)selecting, classifying, and rating risks

ERISA requires that certain benefit and insurance plan information be made available to all of the following EXCEPT A)the Internal Revenue Service B)the state legislature C)the Department of Labor D)participants

B)the state legislature

If a life insurance applicant is given a binding receipt, when does her coverage become effective? A)On the date the policy is issued B)On the date the applicant proves to be insurable C)On the date the receipt is given D)On the date the policy is delivered

C)On the date the receipt is given

AGC Publishing applied for key-person life insurance on its chief executive officer. Which of the following parties must sign the application? A)An officer of AGC and the agent handling the application B)The CEO and another officer of AGC C)The CEO, another officer of AGC, and the agent handling the application D)The CEO and the agent handling the application

C)The CEO, another officer of AGC, and the agent handling the application

Elaine signs an application for a $50,000 life policy, pays the first premium, and receives a conditional receipt. If Elaine were killed in an auto accident 2 days later, A)the insurer could reject the death claim because the underwriting process was never completed B)the premium would be returned to Elaine's family because the policy had not been issued C)her beneficiary would receive $50,000, if Elaine qualified for the policy as applied for D)the company could reject the application on the basis that the death was accidental

C)her beneficiary would receive $50,000, if Elaine qualified for the policy as applied for

If an application for insurance is sent to the insurer without the first premium, but the premium is paid when the policy is delivered, the effective date of coverage is A)the date the application was taken B)the date the policy was delivered C)the date the policy was issued D)the date the premium was paid

C)the date the policy was issued

Which of the following would be an authorized method of handling an initial premium payment? A)Assure the applicant that a written receipt will be provided at policy delivery B)Tell the applicant that written receipts are only required for cash transactions C)Advise the applicant that a written receipt will be sent from the insurer D)Provide the applicant with a signed receipt of the appropriate type (binding or conditional)

D)Provide the applicant with a signed receipt of the appropriate type (binding or conditional)

ERISA was enacted to A)provide tax incentives to employers B)protect the interests of employers in defined pension plans C)distribute Social Security benefits D)protect the interests of participants in employee benefit and health plans

D)protect the interests of participants in employee benefit and health plans

Which of the following criteria may be used when determining the premium rate for an insurance applicant? A)Age B)Race C)Blindness D)Religion

A)Age

Sam applied for a term life insurance policy, paid the initial premium, and received a conditional receipt on December 1. If the insurer issued the policy on January 1 and the agent delivered the policy on January 3, the policy effective date is A)December 1 B)January 1 C)January 3 D)when the policy is delivered and a statement of continued good health is obtained

A)December 1

All of the following are sources of insurability information about life insurance applicants EXCEPT A)Social Security reports B)the application C)Medical Information Bureau reports D)inspection reports

A)Social Security reports

Which section of the application should contain a record of any injuries the applicant may have suffered? A)A special questionnaire B)The medical section C)The agent's report D)The MIB

B)The medical section

Anna applied for a $2 million life insurance policy and paid the first premium but was later found to be uninsurable. The agent gave her a receipt that guarantees coverage until the insurer formally rejects her application. Which type of receipt did Anna receive? A)Conditional B)Approval C)Insurability D)Binding

D)Binding

Which of the following situations would create a possible errors and omissions liability to the producer? A)The producer fails to inform the client that her policy is being canceled at the end of the year. B)The producer informs the insurer that he has serious doubts about the applicant's insurability. C)The producer fails to return phone calls from the client. D)During the sale of a replacement health policy, the producer tells an applicant that the new policy will cover expenses ordinarily paid by Medicare.

D)During the sale of a replacement health policy, the producer tells an applicant that the new policy will cover expenses ordinarily paid by Medicare.

Which of the following statements regarding the delivery of a life insurance policy is NOT correct? A)During the delivery appointment, the agent should ask for referrals. B)During the delivery appointment, the agent should review the policy with the policyholder. C)Agents will usually get a signed receipt from the policyowner. D)An agent has an ethical responsibility to explain the policy, including any riders, exclusions, or other details of the policy, to the policyholder.

A)During the delivery appointment, the agent should ask for referrals

Major risk factors in life and health insurance underwriting include all of the following EXCEPT A)financial status B)habits or lifestyle C)physical condition D)occupation

A)financial status

An applicant for health insurance completes the application and satisfies all of the conditions of the conditional receipt. If the policy is eventually issued as applied for, coverage takes effect A)just as if the policy had already been issued B)as soon as the policy has been delivered to the applicant C)as soon as the underwriting process has been completed D)as soon as the policy has been issued

A)just as if the policy had already been issued

The concept of agent confidentiality requires all of the following practices EXCEPT A)notifying the applicant of a substandard rating decision by the insurer B)avoiding gossiping about an applicant's personal information with others C)notifying the applicant of insurer privacy practices D)keeping completed applications from being seen by anyone except the applicant and authorized insurer personnel

A)notifying the applicant of a substandard rating decision by the insurer

An agent may do all of the following to comply with disclosure notification rules EXCEPT A)provide a copy of the information disclosure procedures form to the state Department of Insurance B)obtain the applicant's signature on the disclosure form authorizing the insurer to gather and disseminate information C)notify the applicant of the insurer's information disclosure procedures with a written form D)answer any questions the applicant may have regarding the insurer's information gathering and dissemination practices

A)provide a copy of the information disclosure procedures form to the state Department of Insurance

Which of the following is NOT considered unfair discrimination? A)Refusing to issue an annuity to a man because he is only 25 years old B)Charging a higher individual life insurance premium for a 50-year-old than for a 25-year-old C)Refusing to issue an individual life insurance policy to a woman because she is unmarried D)Refusing to insure someone specifically because another insurer refused to write a policy on that person

B)Charging a higher individual life insurance premium for a 50-year-old than for a 25-year-old

Which of the following does NOT appear in the producer's report? A)Habits B)Education C)Character D)Financial status

B)Education

Which of the following statements pertaining to the Medical Information Bureau (MIB) is CORRECT? A)Information maintained by the MIB includes socio-economic data such as income, level of education, and zip code. B)Information obtained from the MIB by insurers may not be used as the sole reason to decline an applicant's request for insurance. C)Insurers must report all underwriting decisions to the MIB. D)Insurers do not need to get release of information forms from applicants.

B)Information obtained from the MIB by insurers may not be used as the sole reason to decline an applicant's request for insurance.

Which of the following statements pertaining to the Fair Credit Reporting Act is NOT correct? A)The Fair Credit Reporting Act does not apply to insurance companies who use their own staffs to investigate an applicant for insurance. B)The Fair Credit Reporting Act is a state law that helps to ensure accurate reporting of information about consumers. C)Peg's application for life insurance is rejected because of an unfavorable consumer report. She has a right to know what information the reporting agency has and can insist that any errors in the data be corrected. D)A life insurance company obtains a consumer report on Burl, an applicant, without advising him of its intended action. The company has violated the Fair Credit Reporting Act.

B)The Fair Credit Reporting Act is a state law that helps to ensure accurate reporting of information about consumers.

An attending physician's statement (APS) requested by the underwriting department will normally contain all of the following applicant information EXCEPT A)the applicant's current medical condition as known to the physician B)a Medical Information Bureau report C)the applicant's medical history and treatment as known to the physician D)copies of the applicant's medical records with the physician

B)a Medical Information Bureau report

For situations where no initial premium was paid when the application was taken, when delivering that policy the agent is generally required to do all of the following EXCEPT A)obtain a statement of good health from the insured B)present the insured with a conditional receipt C)explain the policy, its provisions, and any riders, exclusions, or ratings involved D)collect any premium due

B)present the insured with a conditional receipt

James signed an application for a $50,000 life insurance policy and paid the first premium on October 1. The agent issued a conditional receipt. A week later, James took the required medical examination and was found to be insurable. If he dies before the insurer approves the application, A)no coverage will be provided, but James's premium will be refunded B)the coverage will be retroactively effective C)no coverage will be provided D)the coverage will be retroactively effective, but the policy will only pay $25,000

B)the coverage will be retroactively effective

Malik works as a dentist and mountain climbs, skis, and flies airplanes in his spare time. When he applies for a life insurance policy, the agent's and Malik's signatures will be required on all of the following documents EXCEPT A)the application B)the report issued by the Medical Information Bureau C)a questionnaire regarding Malik's aviation activities D)a form authorizing the insurer to obtain investigative consumer reports and medical information

B)the report issued by the Medical Information Bureau

Louise applied for a $40,000 life insurance policy, paid the initial premium, and received a conditional receipt. Which of the following statements is NOT correct? A)If Louise completed her requirements by taking the required medical exam, but died 4 days later from an accidental fall, the insurer would still pay the beneficiary the coverage amount as long as the policy was issued as originally applied for. B)If Louise died from an accidental fall a few days before her required medical exam, the insurer would return the full premium that was paid with the application with no coverage ever having gone into effect. C)If Louise died of a heart attack 1 day before taking the required medical exam, the insurer would still pay the beneficiary the coverage amount stated in the application. D)If Louise died of a heart attack 1 day after completing the medical exam, which fulfilled her requirements, the insurer would continue to underwrite the policy as if she were still alive.

C)If Louise died of a heart attack 1 day before taking the required medical exam, the insurer would still pay the beneficiary the coverage amount stated in the application.

Which of the following statements pertaining to a temporary insurance agreement is CORRECT? A)Coverage begins when the application is signed and the premium is paid, assuming any required medical exam is scheduled within 3 days. B)It provides protection against death by accident, but not death from natural causes. C)It provides temporary coverage until an application is rejected or the policy is issued. D)It provides term insurance protection until the policy is converted to permanent insurance.

C)It provides temporary coverage until an application is rejected or the policy is issued.

On August 1, Roger completed an application for a major medical policy, gave his agent a check for the initial premium, and received a conditional receipt from the agent. No medical examination was required. On August 3, the agent submitted Roger's application and premium to the insurance company. On August 6, Roger was involved in an accident and admitted to a hospital. On August 12, the agent received Roger's policy from the insurance company. Which of the following statements concerning this situation is CORRECT? A)Roger's coverage began the day the agent sent the application and premium to the insurance company. B)Roger's coverage began the day the insurance company received the application and premium from the agent. C)Roger's coverage began when he received the conditional receipt. D)Roger's coverage will begin when he receives the policy from the agent.

C)Roger's coverage began when he received the conditional receipt.

Lawrence signed an application for a life insurance policy on September 2 and took a required medical exam on September 4. He gave the agent a check for the initial premium and received a conditional receipt at the time of application. The policy was issued as originally applied for and the agent delivered the policy to him on October 15. The earliest effective date for Lawrence's insurance policy would be A)October 15 B)September 2 C)September 4 D)December 31

C)September 4

Of the following, which is a situation that could result in the conditional receipt becoming void? A)The applicant's policy is issued as applied for. B)The applicant dies after the policy is issued. C)The applicant is found to be a substandard risk. D)The applicant dies before the policy is issued.

C)The applicant is found to be a substandard risk.

Chantal applied for life insurance on November 1, but she did not submit a premium payment with the application. She underwent a physical examination on November 10, which she passed, and the results of that exam were forwarded to the insurance company. The policy was issued by the company on November 15, and the agent delivered the policy to Chantal on November 17, at which time she paid the first premium. When did Chantal's coverage become effective? A)November 10 B)November 15 C)November 1 D)November 17

D)November 17