Chapter 6 quiz
Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine:
Probability of making timely premium payments.
Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant?
Risk Classification
What kind of risk are amateur pilots classified as?
Special class risks
The highest premium payment would be charged to which risk classification?
Substandard.
On delivery of a policy, a signed statement of good health is typically requested if:
The application was submitted without the initial premium.
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 an:
Conditional receipt.
Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called:
Conditional receipt.
A substandard or special class risk typically results in:
A premium that is higher than for a normal risk
Which of the following statements concerning a life insurance policy is TRUE?
An issued policy can never be changed by a producer.
An incomplete life insurance application submitted to an insurer will result in which of these actions?
Application will be returned to the writing agent.
Which of the following is NOT a factor typically used by insurers to classify risk?
Education level
On January 8th, 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 14th and issued the policy January 15th. The producer delivered the policy on January 26th and collected the first premium. When did the coverage become effective?
January 26th.
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.
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.
