Ch5 Life insurance underwriting and policy issue

What is being delivered during a policy delivery? -a binding receipt to the proposed insured -insurance contract to the proposed insured -application and initial premium to the insurer -policy summary sheet and disclosure material to the proposed insured

Insurance contract to the proposed insured

At what time must a policyowner have insurabel interest on the insured in order for the life policy to be valid? -after the contestable period -when the policy proceeds are paid -at the time of application -when the insured dies

at the time of application

Who is not required to sign a life insurance application? -adult insured -policyowner -agent -beneficiary

beneficiary

On Jan. 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on Jan. 14 and issued the policy Jan 15. The producer delivered the policy on Jan. 26 and collected the first premium. When did the coverage become effective? -Jan. 8 -Jan. 14 -Jan. 15 -Jan. 26

Jan. 26

What action should a producer take if the initial premium is not submitted with the application? -keep the application until premium is paid -forward the application to the insurer after giving the applicant a binding receipt -forward the application to the insurer without the initial premium -forward the application to the insurer after giving the applicant a conditional receipt

forward the application to the insurer without the initial premium

An insurance company may not reject a prospective insured's life application on the basis of which of the following factors? -hobbies -weight -gender -medical history

gender

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? -geographical location -source of income -risk classification -marital status

risk classification

P is a producer who notices 5 questions on a life application were not answered. What actions should P take? -Mail incomplete application to applicant to be completed and returned to the agent -submit the application as-is to the insurer -call the applicant and complete application over the phone -set up a meeting with the applicant to answer the remaining questions

set up a meeting with the applicant to answer the remaining questions

Which of the following statements is correct about an agent who is taking an insurance application? -the agent should avoid asking the applicant questions that may cause embrassment -the agent should have the applicant initial any changes made on the application -the agent may allow a member of the applicant's immediate family to sign the application if the applicant is not available -the applicant may answer routine questions on the application for the applicant

The agent should have the applicant initial any changes made on the application

Any changes made on an insurance application requires the initial of whom? -insured -agent -applicant -beneficiary

applicant

On Aug. 6, D submitted an application for a $50,000 Life insurance policy and did not pay the initial premium. On Aug. 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on Aug. 20 and D explains what had recently taken place with the doctor. What action should the producer then take? -collect initial premium -collect initial premium along with a signed health statement -explain to the applicant the policy is no longer in effect due to change in health condition -collect initial premium and leave a binding receipt

collect initial premium along with a signed health statement

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. Assuming that T is an acceptable risk, what item is given to T? -binding receipt -conditional receipt -warranty receipt -backdated receipt

conditional receipt

A Medical Information Report (MIB) report may disclose which of the following -prior preferred rating -prior use of marijuana -prior lapsing of policy -prior bankruptcy judgement

prior use of marijuana

Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine -driving history -probability of making timely premium payments -if applicant is a tobacco user -overall health of the applicant

probability of making timely premium payments

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? -deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account -return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company -cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company -deposit the check in to his personal account, use the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company

return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company