Field Underwriting, Application, Premiums, Receipts

Which of the following statements about a temporary insurance agreement is CORRECT?

A temporary insurance agreement is just that: temporary coverage until an application is rejected or the policy is issued. The correct answer is: It provides temporary coverage until an application is rejected or the policy is issued.

Which of the following does not demonstrate constructive delivery?

Constructive delivery occurs when the insurer divests all control over the policy to the policyowner. Delivery has not occurred when the agent issues a conditional receipt. The correct answer is: A conditional receipt is issued to the applicant

The agent must provide the buyer's guide to the applicant:

The buyer's guide must be provided by law to the applicant at policy delivery. The correct answer is: When the policy is delivered

Of the following, who must explain the reason for premium increases to a life insurance applicant?

The agent is responsible for explaining any changes in coverage to the applicant. The correct answer is: The agent

At what age may a minor purchase a life or health insurance contract?

Once a minor reaches the age of 15, they may purchase a life or health insurance policy. The correct answer is: 15

Field underwriting ________ adverse selection.

As field underwriters, agents help reduce the chance of adverse selection. Adverse selection cannot be completely eliminated by field underwriting; however, it reduces the chance of adverse selection. The correct answer is: Reduces

A life insurance application can usually be backdated for a maximum of how many months?

In most states, a life insurance application can be backdated up to six months. The correct answer is: 6 months

Telemarketers may call phone numbers not on the Do Not Call List from:

Telemarketers may call phone numbers not placed on the Do Not Call List from 8am _ 9pm. The correct answer is: 8am to 9pm

All of the following statements are true regarding insurance application procedures, EXCEPT:

The application is one of the key sources used by underwriters to collect information and establish insurability. In many states the application becomes part of the insurance contract. For this reason, the producer is responsible for making sure that the applicant has completely filled out the application, and all signatures have been obtained. Producers cannot make any changes in the application. Instead, the producer should notify the applicant of the missing information, and have the applicant fill in the required information. The correct answer is: Producers can fill in any missing information they discover on the application.

If a company issues a conditional receipt to an applicant who has paid an initial premium for a policy that does not require a medical examination:

A conditional receipt is given when the applicant pays the first premium at the time they sign the policy application. A conditional receipt covers the applicant immediately from the date of application, providing that their application passes the underwriting requirements for the policy. Thus, the applicant is covered at the present time. If a medical examination is required, coverage begins after the applicant passes the medical examination. The correct answer is: The applicant is immediately covered.

Coverage is effective:

Coverage is effective with collection of the initial premium, approval of the application, and policy issuance and delivery. If the initial premium does not accompany the application, the premium must be collected by the agent. In some cases, the insurer requires the agent to collect a statement of good health from the insured at the time of delivery. If the initial premium is not submitted with the application, the policy effective date is established by the insurer. In this case, it could be the date of policy issuance, or the date the policy is delivered to the applicant, premium collected, and statement of continued good health signed. The correct answer is: With collection of the initial premium, approval of the application, policy issuance and delivery

In Ray's application for life insurance an applicant failed to complete one part regarding family history. In his statement, the agent described the family as long-lived and healthy. If an insurance company accepts the application in the incomplete form and the applicant for coverage dies young from a cardiac condition that had taken the lives of both his parents before age 50, will the company deny or accept the claim of the beneficiaries?

If a company accepts an incomplete application, in the event of a claim, the company cannot deny that claim based on missing information in the application. By accepting the application, it waived its right to the missing information. The correct answer is: It will pay the claim, because in accepting the application, it waived its right to the missing information.

An individual signed an application for a $100,000 life insurance policy and paid the first premium on January 1. The agent issued an insurability receipt. A week later, the required medical examination proves the person insurable. If the person dies before the insurer approves the application:

If the person pays the premium, receives an insurability receipt, and proves to be insurable, coverage will be effective retroactively. As a result, the beneficiary will receive the $100,000 death benefit. The correct answer is: The coverage will be retroactively effective.

Who administers the National Do Not Call Registry?

The Federal Trade Commission (FTC) administers the National Do Not Call List. The correct answer is: The Federal Trade Commission

If required by the insurer, the statement of good health must be collected by the producer at the time of:

The agent collects the statement of good health upon policy delivery. If the agent notices the insured's health has worsened, the policy should not be delivered. The correct answer is: Policy delivery