Life Insurance - Life Underwriting
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the: - Agent - Applicant's spouse - National Association of Insurance Commissioners (NAIC) - Applicants physician
Applicants physician
The underwriting process involves all of these EXCEPT for: - credit Report - Policy Loan - Risk Classification - Application
Policy Loan
All of these are considered sources of underwriting information about an applicant except: - Inspection report - Credit report - Rating service - Medical information Bureau
Rating service
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT: - Signed HIPAA Disclosure - Signed amendement - Signed statement of good health - The required premium
Signed HIPAA Disclosure
ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has: - Waived one of its legal rights - Isuued a voidable policy - Committed an act of fraud - assigned i=the risk to the reinsurer
Waived one of its legal rights
A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as: - An insuring agreement - A Mutual Assent - A warranty - A representation
A representation
Before a life insurance policy is issued, which of these components of the contract is required? - A signed application by the prospect - A minimum amount of coverage - Beneficiary's signature on an application - A binding receipts
A signed application by the prospect
T cash surrenders a recently issued a whole life policy. He also request that the proceeds be payable to an unrelated third-party. T would likely be red flagged for violation of. - Glass-Steagall Act - anti-money laundering rules - FINRA regulations - NAIC law
anti-money laundering rules
When an insurance application is taken by a producer, which of these statements is true? - The applicant should have an attorney present during the application process - Any changes made on the application require the applicant's initials - Any changes made on the application can be later initialed by the producer if the applicant is unavailable. - The producer has the discretion to ask or not to ask any questions listed on the application
Any changes made on the application require the applicant's initials
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? - Premium will be fully refunded minus a surrender change - Policy was not returned within the free-look period, premium will not be refunded - Policy was returned within the free-look period, premium will be fully refunded - Premium will be fully refunded minus a prorated amount for the period of February 7- February 13
Policy was returned within the free-look period, premium will be fully refunded
What is the purpose of the U.S.A. Patriot Act - Detect and Deter fraud - detect and deter alien insurance companies - detect and deter terrorism - detect and deter misrepresentation
detect and deter terrorism
Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant? - geographical location - source of income - risk classification - martial status
risk classification
Why is an applicant signature required on a life insurance application? - to attest that the statement on the application are warranties - to attest that these statements on the application or accurate to the best of the applicants knowledge - to give power of attorney to the producer if needed - to attest that all statements on the application are guaranteed to be true
to attest that these statements on the application or accurate to the best of the applicants knowledge
All are true statements regarding the underwriting process except: - signed consent from the applicant must be provided in order to test for aids and HIV virus - Aids and HIV virus exams can be conducted in a discriminatory fashion - the cost of any examination is paid for by the insurer - the original application is the primary source of information used in the underwriting process
Aids and HIV virus exams can be conducted in a discriminatory fashion
A pilot applies for Life Insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. the pilot declines the additional premium modification. the insurer will then likely issue the coverage with a(n) - Aviation Exclusion - Graded Benefit - Disability Rider - Waiver of Premium
Aviation Exclusion
Before a life policy is issued, which of these contract elements is necessary? - a signed application by the prospect - a minimum amount of coverage - a beneficiaries signature on an application - a binding receipt
a signed application by the prospect
When does a life insurance contract become effective if the initial premium is not collected during the application process? - after all medical and personal information has been evaluated - when insurer receives initial premium from the producer - when producer delivers policy and collects initial premium - after application has been approved by the underwriters
when producer delivers policy and collects initial premium
An incomplete life insurance application submitted to an insurer will result in which of these actions? - Application will be returned to the writing agent - Application will be approved with restrictions - Application will be pending until a MIB report is sent to the insurer - Application will automatically be declined
Application will be returned to the writing agent
An underwriter determines that a life insurance applicants risk should be reclassified due to a health issue. This policy may be issued with a - extra premium - concealment clause - extended contestable period - exclusion for the medical condition
extra premium
A medical information report (MIB) report may disclose which of the following: - Prior preferred rating - Prior use of weed - Prior lapsing of policy - Prior bankruptcy judgement
Prior use of weed
Any changes made on an insurance application requires the initials of whom? - Insured - Agent - Applicant - Beneficiary
Applicant
What action should a producer take if the initial premium is NOT submitted with the application? - Keep the application until the premium is paid - Forward the application to the insurer after giving the applicant a binding receipt - Forward the application to the insurer without the initial premium - Forward the application to the insurer after giving the applicant a conditional receipt
Forward the application to the insurer without the initial premium
On January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective. - Jan 8 - Jan 14 -Jan 15 - Jan 26
Jan 26
Life insurance companies are required to establish and maintain any anti-money laundering compliance program according to which federal regulation? - Federal reserve act - USA patriot act - fair credit reporting act - Dodd Frank act
USA patriot act
Which parts of a life insurance policy are guaranteed to be true? - Rating - Representation - Statement - Warranty
Warranty
A $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. At what point does the coverage go into affect? - When the applicant receives the policy and pays the initial premium - When the MIB report is received. - Upon completed medical examination - Upon policy approval
When the applicant receives the policy and pays the initial premium
At what time must a policy owner have insurable interest on the insured in order for the life policy to be valid? - after the contestable period - when the policy proceeds are paid - at the time of application - when the insured dies
at the time of application
Which of the following correctly explains the actions and agent should take if a customer wants to apply for an insurance policy? - have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company. - complete the app plication over the phone with the customer, sign the application for the customer, then send the application off to the insurance company - complete the application and review the information with the customer prior to obtaining the customer signature, then send the application off to the insurance company - have the customer fill out the application and send it to his office for him to sign then send it off to the insurance company
complete the application and review the information with the customer prior to obtaining the customer signature, then send the application off to the insurance company
Which federal law allows an insured to obtain an inspection report on a potential insured? - medical information bureau act - freedom of information act - fair credit reporting act - medical information act
fair credit reporting act
What is the purpose of a policy summary? - it details the commissions earned by the agent - a guarantee his policy will be issued - it allows the consumer to compare the cost of different policies - it highlights the critical parts of the policy issued
it highlights the critical parts of the policy issued
Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine: - driving history - probability of making timely premium payments - if applicant is a tobacco user - overall health of the applicant
probability of making timely premium payments
Agent Jay takes an application and initial premium from an applicant and send the application and premium check to the insurance company. The insurance company returns the check back to Jay because the check is made out to Jay instead of the insurance company. What action should Jay take? - deposit the applicants check into his account and make a personal check out to the insurance company from his personal account. - return to the customer, collect a new check made out to the insurance company, and send a new check out to the insurance company - cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company - deposit the check into his personal account, use the funds to purchase a cashiers check, and send a new cashiers check back to the insurance company
return to the customer, collect a new check made out to the insurance company, and send a new check out to the insurance company