5 - Life Insurance Underwriting and Policy Issue

The underwriting process involves all of these EXCEPT for?

- Policy loan. ( A policy loan is not a factor in the underwriting process.)

An incomplete life insurance application submitted to an insurer will result in which of these actions?

- Application will be returned to the writing agent. ( If the company discovers a mistake or incompletion, it usually returns the application to the producer.)

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT?

Free-look period has expired. ( In this situation, the policy will go into effect after all these actions occur EXCEPT the expiration of the free-look period.)

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

- Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company .

Which of the following statements is CORRECT about an agent who is taking an insurance application?

-The agent should have the applicant initial any changes made on the application. (An agent who is taking an insurance application should have the applicant initial any changes made on the application.)

Any changes made on an insurance application requires the initials of whom?

- Applicant. (When an applicant makes a mistake in the information given to an agent in completing the application, the applicant can have the agent correct the information, but the applicant must initial the correction.)

Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT?

"Signed HIPAA disclosure" (Upon delivery of a rated life insurance policy, the Producer must obtain all of these EXCEPT a "Signed HIPAA disclosure". The HIPAA disclosure should be taken at the time of sale with the application.)

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

--Conditional. (A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.)

What action should a producer take if the initial premium is NOT submitted with the application?

- Forward the application to the insurer without the initial premium. ( In this situation, the producer should submit the application to the insurance company without the premium. However, if a premium is not paid with the application, the policy will not become valid until the initial premium is collected.)

All of these are considered sources of underwriting information about an applicant EXCEPT?

- Rating Services. (All of these are valid sources to obtain underwriting information about an applicant EXCEPT for a rating service (A.M. Best, Standard & Poor's).

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?

- When the conditions of the receipt are met. (A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect)

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the?

- applicant's physician. (Information received from the Medical Information Bureau about a proposed insured may be released to the proposed insured's physician.)

An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)?

-exclusion for the medical condition. ( In this situation, the policy may be issued with an exclusion for the medical problem.)

At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? _

At the time of application. ( With life insurance, insurable interest must exist only at the policy inception.)

What is the purpose of a Policy Summary? "

It highlights the critical parts of the policy issued. ( A Policy Summary highlights the critical parts of the policy issued and describes the coverages, riders, and exclusions.)