Chapter 6 Exam: Life Insurance Underwriting and Policy Issue

Who is NOT required to sign a life insurance application?

Beneficiary

Pat applies for insurance, pays the initial premium, and receives a document from the agent. This document indicates that if the policy is issued, coverage begins on the date of the document. This document is called a(n)?

Conditional Receipt

What is the purpose of a Policy Summary?

It highlights the critical parts of the policy issued

What kind of risk are amateur pilots normally classified as?

Special Class Risks

A substandard or special class risk typically results in?

A premium that is higher than for a normal risk

Which of these statements is true regarding the Medical Information Bureau (MIB)?

ALL OF THE ABOVE -Reports given to member companies contain information regarding the insurability of insurance applications -The proposed insured must give authorization before information can be given to member companies -The MIB is a nonprofit agency which aids in underwriting insurance policies

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

Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called a(n)?

Conditional receipt

The highest premium payment would be charged to which risk classification?

Substandard

T is given a receipt after completing a life insurance application and paying the initial premium. Under this situation, T's coverage is?

Conditional, depending on the insurer's underwriting process

Which of the following is NOT a factor typically used by insurers to classify risk?

Education level

Which of these is NOT a reason the insurance application is important?

When attached to the policy, the application becomes part of the insurance clause

Which of the following statements concerning a life insurance policy is TRUE?

An issued policy can never be changed by a producer

D the agent met with a prospect and ended up selling an insurance policy. While filling out the insurance application, D makes a mistake. In this situation, D MUST?

Correct the information and have the prospect initial the change

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?

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