Underwriting and Policy Issue
All are true statements regarding the underwriting process, EXCEPT:
AIDS and HIV virus exams can be conducted in a discriminatory fashion
When a policy owner cash surrenders a Universal Life Insurance Policy in its early years, this may be considered a red flag for a(n)
Anti money Laundering Violation
Any changes Mae on an insurance application requires the initials of whom?
Applicant
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the
Applicant's Physician
before a life insurance policy is issued, which of these components of the contract is required?
Applicant's signature on application
An incomplete life insurance application submitted to an insurer will result in which of these actions?
Application will be returned to the writing agent
A life insurance application must be signed by all of these, EXCEPT
Beneficiary
Who is NOT required to sign a life insurance application
Beneficiary
Which of the following correctly explains the actions an urgent should take if a customer wants to apply for an insurance policy?
Complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company
T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T?
Conditional receipt
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?
Fair Credit Reporting Act
Which Federal law allows an insurer to obtain an inspection report on a potential insured?
Fair Credit reporting act
What action should a producer take if the initial premium is NOT submitted with the application
Forward the application to the insurer without the initial premium
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT
Free look period has expired
An Insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors?
Gender
In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and
Initial premium
P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P's coverage becomes effective when
P receives the policy and pays the premium
Which of these do NOT constitute policy delivery?
Policy issued with a rating
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?
Policy was returned within the free-look period, premium will be fully refunded
A medical Information Report (MIB) may disclose which of the following
Prior use of marjuana
Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine:
Probability of making timely premium payments
All of these are considered sources of underwriting information about an applicant, EXCEPT:
Rating Services
What would the Medical Information Bureau (MIB) identify?
Testing positive for marijuana use from a previous screening
Why is an applicant's signature required on a life insurance application
To attest that the statements on the application are accurate to the best of the applicants knowledge
Which parts of a life insurance policy are guaranteed to be true?
Warranty
At what time must a policy owner have insurable interest on the insured in order for the life policy to be valid
at the time of application
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
Inspection report
What is being delivered during a policy delivery?
Insurance contract to the proposed insured
What is the purpose of a Policy Summary
It highlights the critical parts of the policy issued
When does a life insurance contract become effective if the initial premium is not collected during the application process
When producer delivers policy and collects initial premium
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
When the conditions of the receipt are met
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of
10,000
The USA Patriot Act was enacted In
2001
Which of these terms accurately defines an underwriters assessment of information on a life insurance application?
Risk Classification
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT
Signed HIPAA disclosure
On delivery of a policy, a signed statement of good health is typically requested if:
The application was submitted without the Initial Premium
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?
The date the agent delivered the policy, collected the initial pre sum, and obtained a good health statement for the insured
K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?
conditional
What is the purpose of the U.S.A patriot Act
detect and deter terrorism
An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)
exclusion for the medical condition
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
Which of these actions should a producer take when submitting an insurance application to an insurer
Inform insurer of relevant information not included on the application
A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as:
a representation
ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has
waived one if its legal rights