Life and Health Insurance Exam
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must...
Respond to the consumer's complaint.
Which is generally true regarding insureds who have been classified as preferred risks?
Their premiums are lower.
Who makes up the Medical Information Bureau?
Insurers
The Federal Fair Credit Reporting Act
Regulates consumer reports
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report...
Must be informed of the source of the report
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data.
Stranger-originated life insurance policies are in direct opposition to the principle of
Insurable interest.
An applicant who receives a preferred risk classification qualifies for
Lower premiums than a person who receives a standard risk.
What is the timeframe for filing relevant Suspicious Activity Reports?
Within 30 days of initial discovery
Which of the following includes information regarding a person's credit, character, reputation, and habits?
Consumer report
A producer agent must do all of the following when delivering a new policy to the insured EXCEPT
Disclose commissions earned from the sale of the policy.
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?
Fair Credit Reporting Act
Another name for a substandard risk classification is
Rated.
What is the purpose of the buyer's guide?
To allow the consumer to compare the costs of different policies
Insurance is a contract by which one seeks to protect another from
loss
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
Which of the following documents delivered to the Policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?
A policy summary
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?
As of the application date
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge a higher premium.
Which of the following will be included in a policy summary?
Premium amounts and surrender values
Which of the following types of risk will result in the highest premium?
Substandard risk
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
When is the earliest a policing may fo into effect?
When the application is signed and a check is given to the agent.
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?
Buyer's Guide
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant
With the policy.
Which of the following best dentists the underwriting process for life insurance?
Selection, classification, and rating of risks
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
Signed waiver of premium
What describes the specific information about a policy?
Policy summary
Which of the following is a risk classification used by underwriters for life insurance?
standard
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicants...
Ancestry
An insurance contract must contain all of the following to be considered legally binding EXCEPT
Beneficiary's consent
The Medical Information Bureau (MIB) was credited to protect
Insurance companies from adverse selection by high risk persons.
An agent and an applicant for a 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?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
An insurance stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Material misrepresentation
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?
Standard risk is representative of the majority of people.
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of
A STOLI policy
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
Consumer report
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
Which of the following would provide an underwriter with information concerning an applicant's health history?
The Medical Information Bureau
