Chp. 5 Life Insurance Underwriting and Policy Issue

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n):

Anti-Money Laundering violation

Before a life insurance policy is issued, which of these components of the contract is required? A.) Applicant's signature on application B.) Beneficiary's signature C.) A conditional receipt D.) Attending Physician Statement (APS)

Applicant's signature on application

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 these actions should a producer take when submitting an insurance application to an insurer? A.) Issue a binding receipt to applicant if no initial premium is submitted B.) Disclose to the applicant the amount of commissions to be earned on this transaction C.) Inform insurer of relevant information not included on the application D.) Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer

C.) Inform insurer of relevant information not included on the application

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?

Fair Credit Reporting Act

The underwriting process involves all of these, EXCEPT for: A.) Credit report B.) Policy loan C.) Risk classification D.) Application

B.) Policy Loan

Which of these do NOT constitute policy delivery? A.) Policy mailed to applicant B.) Policy mailed to agent C.) Policy delivered to the applicant by the agent D.) Policy issued with a rating

D.) Policy issued with a rating

A life insurance application must be signed by all of these, EXCEPT: A.) the policyowner B.) the agent C.) the insured (if an adult) D.) beneficiary

D.) beneficiary

A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? A.) Guaranteed Insurability rider B.) Aviation exclusion C.) Impairment rider D.) Accidental Death Benefit rider

B.) Aviation exclusion

What is being delivered during a policy delivery?

Insurance contract to the proposed insured

What is the purpose of the U.S.A. Patriot Act?

detect and deter terrorism

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application? A.) Risk classification B.) Warranty review C.) Insurable interest D.) Inspection report

A.) Risk classification

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T? A.) Binding receipt B.) Conditional receipt C.) Warranty receipt D.) Backdated receipt

B.) Conditional receipt

Why is an applicant's signature required on a life insurance application?

To attest that the statements on the application are accurate to the best of the applicant's knowledge

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