Chapter 5:Underwriting and Policy Issue
Under the USA PATRIOT Act of 2001, insurer are required to report receipt of cash payments in excess of
10,000$
The USA Patriot act was enacted in
2001
All of these are considered sources of underwriting information about an applicant EXCEPT
Rating sources
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 new check-send check to comapny
which of these terms accurately defines an underwriters assessment of info 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 meeting with applicant
upon delivery of a rated life insurance policy-the producer must obtain each of the following except
Signed HIPPA
Upon delivery, signed good health statement is requested from the applicant-why would this be necessary
The initial premium wasn't submitted with the application
When an insurance application is taken by a producer, which of these statements is true?
any changes made on the application require the applicants intitials
Any changes made on an insurance application requires the initials of whom?
applicant
an applicants medical info received from the medical info bear maybe furnished to the
applicants physican
Before a life insurance policy is issued, which of these components of the contract is required?
applicants signature
what is the intitial source of underwriting for an insurance policy
application containing statements from the insured
An incomplete life insurance application submitted to an insurer will result in which of these actions?
application will be returned to the writing agent
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
a pilot applies for life insurance. the insurer approves the application with a 10$ additional monthly premium modification due to the risk involved. the pilot declines the additional premium. the insurer will likely issue the coverage with an
aviation exclusion
a life insurance application must be signed by all of these except
beneficiary
who is not required to sign a life insurance application
beneficiary
what action should a producer take if the intial premium is not submitted with the application
forward application to insurer without 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
a life insurance application may be rejejected on the basis of all these factors except
gender
which of these factors dont play a role in the underwriting process
marital status
the underwriting process involves everything exept
policy loan
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 in the free look period - premium will be fully refunded
a MIB report may disclose which of the following
prior use of weed
A statement made by an insured is an insurance application that must be true to be the best of ones knowledge and which becomes a part of the contract known as
representation
alll are true statements regarding the underwriting process except-
AIDS AND HIV virus exams can be conducted in discriminatory fashion
when a policy owner cash surrenders a universal life policy in early years-this may be considered a red flag for
ANTI MONey laundering violation
which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy
Complete application review info with customer prior to signature & send app to insurance company
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
T applies for 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
Conditional Reciept
Which Federal law allows an insurer to obtain an inspection report on a potential insured?
FCRA
from what authority derives the requirement that n insurance application contains disclosure stating that an investigative consumer report maybe obtained on an applicant
FCRA
What is being delivered during a policy delivery
Insurance contract to the proposed insured
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 on 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
Jan 26th
which of these do not constitute policy delivery
Policy issued with a rating
consumer reports by an underwriter during the application process can be used to determine
Probability of making timely premium payments
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
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 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 August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?
collect intitial premium along with signed health statement
what is the purpose of USA Patriot act
detect and deter terrorism
an _____ contained in a. life insurance policy states that the policy will not cover certain risks
exclusion
An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)
extra premium
Which of these actions should a producer take when submitting an insurance application to an insurer?
inform insurer of relevant info not included on the application
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
info obtained from a phone convo to the proposed insured can be found in which report
inspection
Purpose of a policy summary
it highlights critical parts of the policy issued
Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant
risk classification
What would the Medical Information Bureau (MIB) identify?
testing positive for marijuana use from a previous screening
which of the following statements is correct about an agent who is taking an insurance application
the agent should have the applicant initial any changes on the application
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 intitial premium and obtained a good health statement from insured
why is an applicants signature required on a life insurance application
to attest that the statement on the application are accurate to the best of the applicants knowledge
The reason fo backdating a policy is
to obtain a premium rate based on an earlier age
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 of its legal rights
a 20,000$ life insurance policy application is completed however the producer doesn't collect the intitial premium. at what point does the coverage go into effect
when the applicant recieves the policy and pays the intitial 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 reciept are met