Completing the Application, Underwriting, and Delivering the Policy

stranger-originated life insurance policies are in direct opposition to the principle of

insurable interest

buyer's guide

generic information about life policies; must be provided at the time of application

an applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

fair credit reporting act

premium

The money paid to an insurance company to purchase a policy

insurance is the transfer of

risk

Effective Date of Coverage

if the premium is not paid with the application, the agent must obtain the premium and a statement of continued good health at the time of policy delivery

company underwriting

-multiple sources of information (application, consumer reports, MIB) -risk classification (standard, substandard, preferred)

lapse

policy termination due to nonpayment of premium

field underwriting (by agent)

-application (completed and signed) -agent's report -premiums with application and conditional receipts

what is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

consideration

Mark was issued a conditional receipt for insurance on August 14. The insurance company found no reason to reject the risk or classify it other than as standard. Mark was killed in a car accident on August 22, before the policy was issued. In this case, the insurance company will

issue the policy anyway and pay face value to the beneficiary

in the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. Which of the following is true concerning the policy premium?

it will likely be higher because the applicant is a substandard risk

consideration

something of value that each party gives to the other

all of the following are requirements for life insurance illustrations EXCEPT

they must be part of the contract

Under the Fair Credit and Reporting Act, if the consumer challenges the accuracy of the info contained in his or her report, the reporting agency must

respond to the consumer's complaint

the term "illustration" in a life insurance policy refers to

a presentation of nonguaranteed elements of a policy

policy summary

description of features and benefits of the policy being issued

Insurance is a contract by which one seeks to protect another from

loss

illustrations

presentation of nonguaranteed elements

The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What should the insurer do with the application?

return to the applicant for completion

When would a misrepresentation on an insurance application be considered fraud?

if it is intentional and material