Chapter 18/4: Underwriting, Application, Delivery Review
Susan has just purchased a life insurance policy. Coverage becomes effective when:
Coverage becomes effective in a life policy when the initial premium is paid, and the policy is delivered. The correct answer is: The initial premium is paid, and the policy is delivered.
Fred, the producer realizes that the prospective client, Barney, omitted information about a prior illness. What should Fred do?
The producer has the duty to inform the prospective insured that a claim might be rejected later on with possible repercussions. This is a form of fraud, and a claim might be rejected on this basis. The correct answer is: Tell the prospective client that a claim might be rejected later due to the omission.
Thomas is applying for a life insurance policy. Life insurance applications require a signature from:
A life insurance application requires the agent, proposed insured, and the policy owner if different from the insured to sign it. The correct answer is: All of the above
Martin is applying for a life insurance policy. When is a statement of good health required:
A statement of good health is needed when the application does not include the initial premium with the application. The correct answer is: The application does not include the premium.
Holly would like to purchase a life insurance policy. In life insurance, insurable interest must be present at the time of:
Insurable interest must be present when the application is made. The correct answer is: Application
Insurance applications require a signature from all the following EXCEPT:
An insurance application requires the agent, proposed insured, and the policyowner if different from the insured to sign it. The correct answer is: The insurer
Who must sign the insurance application?
An insurance application requires the agent, proposed insured, and the policyowner if different from the insured to sign it. The correct answer is: All of the above
The insurance application does NOT need to be signed by which of the following?
An insurance application requires the agent, proposed insured, and the policyowner if different from the insured to sign it. The correct answer is: The insurer
Laura's life insurance application was submitted on September 16, without the initial premium, and the insurer requires a medical examination. The medical examination was completed on September 23, and the policy was issued, rated, on September 28. The agent delivers the policy on September 29. When is coverage effective?
Coverage begins on September 29, after the statement of good health is signed, and the initial premium is paid. The premium would also be higher due to it being rated. The correct answer is: September 29, after the statement of good health is signed, and the initial premium is paid.
Underwriting is the process that insurance companies use to select, classify and rate risks. What is the biggest source of information used in underwriting?
The application is the biggest source of information used in underwriting. The correct answer is: Application
On June 26, Brian's life insurance application was submitted with the initial premium, and on June 30 the insurer issued the policy standard. Due to it being close to a holiday, the agent did not deliver the policy until July 6. A conditional receipt was issued without a required medical exam. When is Brian's coverage effective?
Coverage is effective on June 26. Since the premium was paid with the application, a statement of good health does not need to be signed. The correct answer is: 26-Jun
On February 7, Tina's life insurance policy application was submitted without the initial premium. The insurer requires a medical exam, which is completed on February 17. On February 21, the insurer issued the policy standard, and the producer delivered it on February 24. When is coverage effective?
Coverage begins on February 24, after the statement of good health is signed, and the initial premium is paid. The correct answer is: February 24, after the statement of good health is signed, and the initial premium is paid.
Jean's life insurance application was submitted on May 18, without the initial premium, and the insurer requires a medical examination. The examination is completed on May 22, and the policy is issued, rated, on May 25. The agent delivers the policy on May 27. When is coverage effective?
Coverage begins on May 27, after the statement of good health is signed, and the initial premium is paid. The premium would also be higher due to it being rated. The correct answer is: May 27, after the statement of good health is signed, and the initial premium is paid.
A producer submited an application with a premium. After underwriting, the insurer sent back the policy, rated, with an impairment rider. What should the producer do now?
If the policy is rated, the producer needs to explain the issue and collect an additional premium. The correct answer is: Explain the issue and collect an additional premium.
On January 5, Paul submitted an application without the initial premium. The insurer requires a medical exam, which is completed on January 17. On January 22, the insurer issued the policy standard, and the producer delivers it on January 25. When is coverage effective?
Coverage begins on January 25, after the statement of good health is signed, and the initial premium is paid. The correct answer is: January 25, after the statement of good health is signed, and the initial premium is paid.
A conditional receipt issued by the agent at the time of application provides which of the following?
The agent issues a conditional receipt to the applicant when the application and premium are collected. If the insurer accepts the policy as applied for, the coverage will take effect from the date of the application or medical exam, whichever is later. The correct answer is: An indication that coverage will begin as of the application date if the policy is issued without modification
Ashley, the producer, notices that she forgot to ask a few questions on the application after leaving the clients home. She is in a hurry to submit the application, what should she do?
The agent should return to the prospective insureds home and ask the questions in person. Then he or she should have the client initialize the changes on the application. The correct answer is: Go back and ask the questions, then have the client initial the changes
Sara submitted a life insurance application along with the initial premium on December 10th. On December 23 the insurer issued the policy standard. Because of the Christmas holiday, the agent did not deliver the policy until December 28. A conditional receipt was issued without a required medical exam. When is coverage effective?
Coverage is effective on December 10. Since the premium was paid with the application, a statement of good health does not need to be signed. The correct answer is: 10-Dec
The producer notices he made a mistake in completing the application. He or she should:
For minor changes, the agent should correct the errors, and then have the client initial them in his or her presence. For major changes, the agent should start a new application in person. The correct answer is: For a small change, he or she should fix the mistake, and then have the client initial the changes in his or her presence.
The producer notices that he or she forgot to ask a few questions on the application after leaving the clients home. Before submitting it he or she should:
The agent should return to the prospective insureds home and ask the questions in person. Then he or she should have the client initialize the changes on the application. The correct answer is: Go back and ask the questions, then have the client initial the changes
Charlie is purchasing a life insurance policy. The policy summary is usually given to the purchaser at the time of:
The policy summary is usually given to the purchaser at the time of delivery. The correct answer is: Delivery
Terry realizes that the client left off information about a prior illness. What should the he do?
The producer has the duty to inform the prospective insured that a claim might be rejected later on with possible repercussions. This is a form of fraud, and a claim might be rejected on this basis. The correct answer is: Tell the prospective client that a claim might be rejected later due to the omission.
