Life Insurance CH.1 (Completing the Application, Underwriting, and Delivering the Policy)

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

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?

Buyers Guide

Which of the following would not be considered an exception to the National Do Not Call List?

Calls based from outside of the United States

Who makes up the Medical Information Bureau?

Insurers

Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT

Other insurance coverages

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 the application for completion

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting act

Which of the following includes information regarding a persons credit, character, reputation, and habits?

Consumer report

Which of the following entities established the Do Not Call registry?

The federal trade commission

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 policy is issued, what would be the policy's effective date.

The date of the medical exam

All of the following are duties and responsibilities of producers at the time of application except

change any incorrect statement on the application by personally initiating next to the corrected statement

Which of the following documents delivered to the policy owner 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

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

If it is intentional and material

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the 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 followoing is true concerning the policy premium?

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

An applicant who receives a preferred risk classification qualifies for

Lower premiums than a person who receives a standard risk

An insured 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

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt

If an agent fails to obtain the applicant's signature on the insurance application, the agent must?

Return the application to the applicant for a signature

Which of the following best details the underwriting process for life insurance?

Selection, classification, and rating of risk

Which of the following is a risk classification used by underwriters for life insurance?

Standard

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customers associates, friends, and neighbors provide the reports data

The responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of his or her knowledge is the responsibility of?

The producer

Which is generally true regarding insureds who have been classified as preferred risk?

Their premiums are lower

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

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

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

Part 1 of the application for life insurance includes

questions regarding current coverage being applied for and any other insurance coverages w