chapter 5

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

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

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

Any changes made on an insurance application requires the initials of whom?

Applicant

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

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

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

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?

Risk classification

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 premium, and obtained a good health statement from the insured

Which parts of a life insurance policy are guaranteed to be true?

Warranty

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

A life insurance application must be signed by all of these EXCEPT

beneficiary

In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and

the initial premium