Completing the Application, Underwriting, and Delivery Policy

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe? a. aleatory b. unilateral c. conditional d. contingent

C. conditional

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is A. Conditional B. Aleatory C. Personal D. Unilateral

A. Conditional

An applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to A.Require a yearly medical examination B. Lower its insurability standards C. Refuse to issue the policy D. Charge a higher premium

D. Charge a higher Premium

All of the following information about the applicant is identified in the General INformation section of a life insurance application EXCEPT A. occupation b. education c. Age d. gender

b. education

What describes the specific information about a policy? A buyers guide B. producer's report C. policy summary D. Illustrations

C. Policy summary

The responsibility of making certain that an application for insurance is filled out completely, correctly and to the best of his or her knowledge is the responsibility of whom? A. The producer B. the beneficiary of the applicant C. the insurance company D. the applicant

A. The producer (agent)

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date. A the date of the medical exam b.the date of the policy delivery c. the date of issue d.the date of application

A. the date of medical exam

Insurance policies are not drawn up through negotiation, and an insured has little to say about its provisions. What contract characteristics does this describe? A. Personal B. Adhesion C. Unilateral D. Conditional

B. Adhesion

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does the describe? A. adhesion B. Conditional C. Aleatory D. Good Health

C. Aleatory

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must A. Respond B. Defend the report if the agency feels its accurate C. Change the report D. Send an actual certified copy of the entire report to the consumer

A. Respond to the consumer's complaint

The insurer discovered that one of the applicants for life insurance missed a couple of question on the application. What should the insurer do with the application? A. answer the missed questions for the applicant B. Acknowledge the missed questions with a signature and continue the policy issue process C. Proceed with issuing a policy D. Return to the applicant for completion

D. Return to the applicant for completion

What is the purpose of a conditional receipt? A. It is intended to provide coverage on a date prior to the policy issue B. It guarantees that a policy will be issued in the amount applied for. C. It serves as proof that the applicant has been determined insurable D. It is given only to applicants who fully prepay the premium

A. It is intended to provide coverage on a date prior to the policy issue

Which of the following will be included in a policy summary? a. premium amount and surrender values b. copies of illustrations and application c. comparisons with similar policies d. primary and secondary beneficiary designations

A. Premium amounts and surrender values

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

Upon policy delivery, the producer may be required to obtain any of the following EXEPT A. delivery receipt B. signed waiver of premium C. statement of good health D. payment of premium

B. Signed waiver of premium

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 reports data

D. The customers associates, friends and neighbors provide the report's data.

What is the purpose of the buyer's guide? A. to provide the name and address of the agent/producer issuing the policy B. To list all policy riders C. To provide information about the issued policy D. To allow the consumers to compare the costs of different policies

D. To allow the consumer to compare the costs of different policies

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? A. on the designated effective date B. on the application date c. when the agent submits the application to the company and the company issues a conditional receipt D. When the agent delivers the policy collects the initial premium and the applicant completes an acceptable statement of good health

D. When the agent delivers the policy collects the initial premium and the applicant completes an acceptable statement of good health.

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? A. legal purpose B. Contract of adhesion C.Acceptance D. Consideration

D. consideration

Which part of an insurance application would contain information regarding the applicant's medical history? a. Part 2 b. Inspection report c.agent's report d Part 1

A. Part 2

Stranger-Originated Life Insurance (STOLI)policies are in direct opposition to the principle of A. indemnity B. Insurable interest C Law of large numbers D. Good faith

B. Insurable interest

In the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. Which of the following is true concerning the policy premium? A. the applicant's habits and health do not affect the premiums B. it will be lower because the applicant is a preferred risk C.it will likely be higher because the applicant is a substandard risk D. it will likely be the average premium issued to standard risks

C. It will likely be higher because the applicant is a substandard risk

Which of the following is NOT the consideration in a policy? A. the premium amount paid at the time application b. the promise to pay covered losses c. the application given to a prospective insured D. something of value exchanged between parties

C. the application given to a prospective insured

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? A. Consumer privacy Act B. Conditional receipt C. Disclosure rule D. Fair Credit Reporting Act

D. Fair Credit Reporting Act