Chapter 2

All of the following signatures would be required on a life insurance application for an adult, except that of the:

Beneficiary

An applicant's signature on an application indicates what?

That their statements are true

What happens if an applicant discovers that there has been inaccurate or incomplete information in any report used during the underwriting process for life insurance?

The applicant has the right to challenge the inaccurate or incomplete information

A generic brochure developed by the NAIC to provide consumers with descriptions of basic types of life insurance as well as the comparative costs of each is called the _______.

Buyer's Guide

Which of the following is most likely to pay the highest premium for a disability income policy, all other factors being equal?

Age 40, welder, tobacco user

During the application process, a mistake is made by the applicant in answering one of the health questions and needs to be corrected. What is the best way to go about this?

Have the applicant initial the change or start over with a completely new application

When an insurer requires that an insured be subjected to a medical examination, who pays for the medical exam?

The insurer The insurer pays for any medical exam it orders.

When producer Pete delivers a policy, he should also do which of the following

Explain the policy fully It is the producer's or agent's responsibility to deliver the policy, verify the insured has remained in good health, and explain the policy to be sure the insured understands the benefits, including endorsements and riders.

All of the following are acceptable methods of policy delivery, except:

Leaving it with a neighbor if they are not at home at their scheduled delivery appointment time

Normally, when the insurer determines that the insured is an acceptable risk, the insurer will send the policy to the ____________.

Producer Normally, the insurer will mail the issued policy to the producer for delivery so that if any outstanding premium is due, it can be collected, if a statement of good health is required, it can be obtained, and any questions the applicant has about the policy can be answered.

If a medical exam is required as part of the underwriting process, who normally conducts the exam?

A physician or nurse

A producer must include their name and address on which of the following?

A policy summary

Which of the following best describes a Statement of Good Health?

It verifies that the insured has not suffered a serious illness or injury requiring surgery or hospitalization since the application date

An applicant determined to have below average risk of loss would be:

Issued a preferred policy In this case, 'below average' is a good thing. A below average risk is preferred because there is less of a chance of a claim being made

An insurance company must adhere to the __________ when gathering information about an applicant from third parties. A Medical Information Bureau Rules

Fair Credit Reporting Act (FCRA)