Life Insurance CH.1 (Completing the Application, Underwriting, and Delivering the Policy)
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
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?
Buyers Guide
Which of the following would not be considered an exception to the National Do Not Call List?
Calls based from outside of the United States
Who makes up the Medical Information Bureau?
Insurers
Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT
Other insurance coverages
The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What should the insurer do with the application?
Return the application for completion
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?
The Fair Credit Reporting act
Which of the following includes information regarding a persons credit, character, reputation, and habits?
Consumer report
Which of the following entities established the Do Not Call registry?
The federal trade commission
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 policy is issued, what would be the policy's effective date.
The date of the medical exam
All of the following are duties and responsibilities of producers at the time of application except
change any incorrect statement on the application by personally initiating next to the corrected statement
Which of the following documents delivered to the policy owner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?
A policy summary
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?
As of the application date
When would a misrepresentation on an insurance application be considered fraud?
If it is intentional and material
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
Issue the policy anyway and pay the face value to the beneficiary
In the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits, which of the followoing is true concerning the policy premium?
It will likely be higher because the applicant is a substandard risk
An applicant who receives a preferred risk classification qualifies for
Lower premiums than a person who receives a standard risk
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Material misrepresentation
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
Premium receipt
If an agent fails to obtain the applicant's signature on the insurance application, the agent must?
Return the application to the applicant for a signature
Which of the following best details the underwriting process for life insurance?
Selection, classification, and rating of risk
Which of the following is a risk classification used by underwriters for life insurance?
Standard
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customers associates, friends, and neighbors provide the reports data
The responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of his or her knowledge is the responsibility of?
The producer
Which is generally true regarding insureds who have been classified as preferred risk?
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?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable statement of good health
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
Under the fair credit reporting act, individuals rejected for insurance due to information contained in a consumer report
must be informed of the source of the report
Part 1 of the application for life insurance includes
questions regarding current coverage being applied for and any other insurance coverages w