Utah Life and Health Exam- Chapter 2: Life Insurance Basics
Who may complete a paramedical report?
A registered nurse
Which of the following would be considered a nonmedical insurance application?
An application on which the medical information is completed by the applicant and the agent only.
Which of the following is the basic source of information used by the company in the risk selection process?
Application
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 following is true concerning the policy premium?
It will likely be higher because the applicant is a substandard risk.
Which of the following will be included in a policy summary?
Premium amounts and surrender values.
Most agents try to collect the initial premium for a submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a...
Premium receipt.
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?
The date of the medical exam.
All of the following are requirements for life insurance illustrations EXCEPT?
They must be part of the contract.
What is the purpose of the buyer's guide?
To allow the consumer to compare the costs of different policies.
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent.
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered...
An unfair trade practice.
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 initialing next to the corrected statement.
If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT?
Erase the incorrect answer and record the correct answer.
All of the following are business uses of life insurance EXCEPT?
Funding against general company financial loss.
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?
Standard risk is representative of the majority of people.
Which of the following types of risk will result in the highest premium?
Substandard risk
Which of the following would provide an underwriter with information concerning an applicant's health history?
The Medical Information Bureau (MIB)
Which of the following best describes the MIB?
The Medical Information Bureau (MIB) is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies, "Yes," which of the following best describes the agent's next step?
The agent must provide a replacement notice to the applicant.
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract.
What is the maximum amount of coverage that Utah Life and Health Insurance Guaranty Association (ULHIGA) will pay?
$500,000
An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information?
Application
Which of the following premium modes would result in the highest annual cost for an insurance policy?
Monthly
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require?
Attending Physician Statement.
Which of the following is NOT true regarding the Needs Approach method of determining the value of an individual's life?
Need is predicted using the number of years until the insured's retirement.
An insurer wants to obtain information from investigators regarding an applicant for insurance. What must the insurer do in order to legally acquire this information?
Present the insured with a Disclosure Authorization Notice.
Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?
Insurance Guaranty Association