Chapter 5 Exam - Life Underwriting

Before a life insurance policy is issued, which of these components of the contract is required A: Applicants' signature on application B: Beneficiary's signature C: A conditional receipt D: Attending Physician Statement (APS)

A: Applicants' signature on application A signature on an application is required before a life policy will be issued

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? A: Fair Credit Reporting Act B: Medical Information Bureau C: Part III of the application D: Life Insurance Buyer's Guide

A: Fair Credit Reporting Act The Fair Credit Reporting Act requires that an insurance application state that an investigative consumer report may be obtained on an applicant.

what would the Medical Information Bureau (MIB) identify? A: Testing positive for marijuana use a previous screening B: Existing life insurance coverage with other carriers C: Credit Scores D: Primary physician

A: Testing positive for marijuana use a previous screening The medical Information Bureau (MIB) report will identify marijuana use determined by a previous screening

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 A: Waived one of its legal rights B: Issued a voidable policy C: Committed an act of fraud D: Assigned the risk to a reinsurer

A: Waived one of its legal rights If an insurer accepts an application that contains unanswered questions and makes the application part of the life contract, the company has waived one of its legal right

All are true regarding the underwriting process, EXCEPT: A: Signed consent from the applicant must be provided in order to test for AIDS and HIV virus B: AIDS and HIV virus exams can be conducted in a discriminatory fashion C: The cost of any examination is paid for the insurer D: The original application is the primary source of information used in the underwriting process.

B: AIDS and HIV virus exams can be conducted in a discriminatory fashion AIDS and HIV testing must be conducted in a uniform fashion and cannot be discriminatory

A student pilot can pay regular costs for her life insurance policy with the addition of which of the following A: Guaranteed Insurability rider B: Aviation exclusion C: Impairment rider D: Accidental Death Benefit rider

B: Aviation exclusion A student pilot can pay standard premium costs for her life insurance with the addition of an aviation exclusion.

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? A: Deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account B: Return the customer, collect a new chcl made out to the insurance company, and send the new check out to the insurance company C: Cross of 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 D: 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

B: Return the customer, collect a new chcl made out to the insurance company, and send the new check out to the insurance company If an agent receives a check made out to them instead of insurance company, they should return the check to the customer and collect a new check property made out to the insurance company

Which Federal law allows an insurer to obtain an inspection report on a potential insured? A: Medical Information Bureau Act B: Freedom of Information Act C: Fair Credit Reporting Act D: Medical Information Act

C: Fair Credit Reporting Act The Fair Credit Report Act of 1970 or FCRA, established procedures for thr collection and disclosure of information obtained on consumers through investigation and credit reports

An insurance company may NOT reject a prospective insured's life application on the basic of which of the following factors? A: Hobbies B: Weighter C: Gender D: Medical history

C: Gender An insurance company may NOT reject a prospective insured's life application on the basic of gender

Which of these factors do NOT play a role in the underwriting of a life insurance policy A: Avocations B: Credit Status C: Marital Status D: Occupation

C: Marital Status Marital status does not affect the underwritting of a life insurance policy

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the: A: Agent B: Applican't spouse C: National Association of Insruance Commissioners (NAIC) D: Applicant's physician

D: Applicant's physician Information received from the Medical Information Bureau about a proposed insured may be released to the proposed insured's physician

A Life insurance application must be signed by all these, EXCEPT: A: the policyowner B: The agent C: The insured (if an adult) D: Beneficiary

D: Beneficiary

Who is NOT required to sign a life insurance application? A: Adult insured B: Policyowner C: Agent D: Beneficiary

D: Beneficiary All of the following individuals must sign a life insurance application EXCEPT the beneficiary

What is the purpose of a Policy Summary? A: It details the commission earned by the agent B: It guarantees a policy will be issued C: It allows the consumer to compare the costs of different policies D: It highlights the critical parts of the policy issued

D: It highlights the critical parts of the policy issued A policy Summary highlights the critical parts of the policy issued and describes the coverage, riders, and exclusions.

On January 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 of January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective A: Jan 8 B: Jan 14 C: Jan 15 D: Jan 26

D: Jan 26 In this situation, coverage became effective on the date the policy was delivered and first premium collected