Finance Chapter 1
Disputes regarding consumer report information
According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT
Change any incorrect statement on the application by personally initialing next to the corrected statement
All of the following are duties and responsibilities of producers at the time of application EXCEPT
Education
All of the following information about the applicant is identified in the General Information section of a life insurance application EXCEPT
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
An agent and an applicant for life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
Lower premiums than a person who receives a standard risk
An applicant who receives a preferred risk classification qualifies for
The date of the medical exam
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later, the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
Beneficiary's Consent
An insurance contract must obtain all of the following to be considered legally binding EXCEPT
conditional
An insurance contract requires that both the insured and insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
Consideration
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?
Inspection Report
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies, and habits. What type of report is that?
Rated
Another name for a substandard risk classification is
Contracts of Adhesion
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
Contracts of adhesion
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
With the policy
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than
Unilateral
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Applicant's past income
In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT
An applicant submits an application to the insurer
In insurance, an offer is usually made when
Loss
Insurance is a contract by which one seeks to protect another from...
As of the application date
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
Signed waiver of premium
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
It is intended to provide coverage on a date prior to the policy issue
What is the purpose of a conditional receipt?
Return the application to the applicant for completion
Which is the appropriate action by the insurer if a prospect insured submitted an incomplete application?
Application
Which is the primary source of information used for insurance underwriting?
Aleatory
Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?
Policy owner
Which of the following individuals must have insurable interest in the insured?
The application given to a prospective insured
Which of the following is NOT the consideration in a policy?
Application
Which of the following is the basic source of information used by the company in the risk selection process?
A debtor has an insurable interest in the life of a lender.
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?
Premium amounts and surrender values
Which of the following will be included in a policy summary?
To help the insured understand all aspects of the contract.
Why should the producer personally deliver the policy when the first premium has already been paid?