Completing the Application, Underwriting, and Delivering the Policy

Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process? a) Illustrations b) Buyer's Guide c) Insurance Index d) Policy Summary

b) Buyer's Guide

In forming an insurance contract, when does acceptance usually occur? a) When an insured submits an application b) When an insurer's underwriter approves coverage c) When an insurer delivers the policy d) When an insurer receives an application

b) When an insurer's underwriter approves coverage

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT a) Payment of premium. b) Delivery receipt. c) Signed waiver of premium. d) Statement of good health.

c) Signed waiver of premium.

A life insurance policy has a legal purpose if both of which of the following elements exist? a) Underwriting and reciprocity b) Offer and counteroffer c) Policyowners and named beneficiaries d) Insurable interest and consent

d) Insurable interest and consent

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? a) They provide additional information from an outside source about a particular risk. b) They provide information about a customer's character and reputation. c) The customer has no knowledge of this action. d) The customer's associates, friends, and neighbors provide the report's data.

d) The customer's associates, friends, and neighbors provide the report's data.

Why should the producer personally deliver the policy when the first premium has already been paid? a) To ensure the producer gets paid commission b) To find out how the family has been doing since the initial presentation c) To make sure the policy is not stolen or lost d) To help the insured understand all aspects of the contract

d) To help the insured understand all aspects of the contract

When is the earliest a policy may go into effect? a) When the first premium is paid and the policy has been delivered b) When the insurer approves the application c) After the underwriter reviews the policy d) When the application is signed and a check is given to the agent

d) When the application is signed and a check is given to the agent

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant a) Upon issuance of the policy. b) Within 30 days after the first premium payment was collected. c) Prior to filling out an application for insurance. d) With the policy.

d) With the policy.

When would a misrepresentation on the insurance application be considered fraud? a) Any misrepresentation is considered fraud. b) If it is intentional and material c) Never: statements by the applicant are only representations. d) When the application is incomplete

b) If it is intentional and material

In insurance, an offer is usually made when a) The completed application is submitted. b) The insurer approves the application and receives the initial premium. c) The agent hands the policy to the policyholder. d) An agent explains a policy to a potential applicant.

a) The completed application is submitted.

Who makes up the Medical Information Bureau? a) Former insured b) Physicians and paramedics c) Insurers d) Hospitals

c) Insurers

What is the purpose of the buyer's guide? a) To allow the consumer to compare the costs of different policies b) To provide the name and address of the agent/producer issuing the policy c) To list all policy riders d) To provide information about the issued policy

a) To allow the consumer to compare the costs of different policies

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? a) Conditional b) Adhesion c) Personal d) Unilateral

a) Conditional

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as a) Aleatory contracts. b) Binding contracts. c) Contracts of adhesion. d) Unilateral contracts.

c) Contracts of adhesion.

If an agent fails to obtain an applicant's signature on the application, the agent must a) Return the application to the applicant for a signature. b) Sign the application for the applicant. c) Sign the application, stating it was by the agent. d) Send the application to the insurer with a note explaining the absence of signature.

a) Return the application to the applicant for a signature.