Completing the Application, Underwriting And Policy Delivery: STUFF I GOT WRONG

Who makes up the Medical Information Bureau?

Insurers (this is so the insurers can compare the info that have collected on the individual)

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

If a telemarketer wants to make an unsolicited sales call to a potential customer, what is the earliest time the telemarketer can call the prospect's residence?

8 am - 9pm (permissible calling hrs)

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report Consumer reports include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.

An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n)

Inspection report. An inspection report may be ordered about an applicant from an independent investigating firm or credit agency. It is a general report of the applicant's finances, character, work, hobbies, and habits.

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

Signed waiver of premium. The policy does not go into effect until the premium has been collected. If the premium was not collected at the time of the application, the producer may also be required to get a Statement of Good Health from the applicant at the time of policy delivery. Waiver of premium is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant.

What is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies The buyer's guide provides generic information about life insurance policies and allows the consumer to compare the costs of different policies. The policy summary provides specific information about the issued policy, as well as the insurer's information.

What's the purpose of a conditional receipt?

Intended to provide coverage on a date prior to the policy issue Coverage commences on the date of the application or the date of a medical examination, whichever is later, on the condition that the applicant is determined to be insurable at the rate applied for.

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested.

What describes the specific information about a policy?

Policy Summary A policy summary describes the features and elements of the specific policy for which a person is applying.

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?

A policy summary A policy summary usually includes all the listed information, and must be delivered along with a new policy.

The term "illustration" in a life insurance policy refers to

A presentation of nonguaranteed elements of a policy. The term "illustration" means a presentation or depiction that includes nonguaranteed elements of a policy of individual or group life insurance over a period of years.

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

Ancestry. The Fair Credit Reporting Act regulates what information may be collected and how the information may be used. Consumer Reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports.

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material A misrepresentation would be considered fraud if it is intentional and material. Fraud would be grounds for voiding the contract.

Which of the following information about the applicant is NOT included in the General Information section of the application for insurance?

MEDICAL BACKGROUND Part 1- General Info of the application includes the general questions about the applicant, including name, age, address, birth date, gender, income, marital status, and occupation. The applicant's medical background is addressed in Part 2- Medical Information

Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?

Medical Information Part 2 - Medical Information of the application includes information on the prospective insured's medical background, present health, any medical visits in recent years, medical status of living relatives, and causes of death of deceased relatives.

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report. Under the Fair Credit Reporting Act, if an insurance policy is declined or modified because of information contained in a consumer report, the consumer must be advised and provided with the name and address of the reporting agency.

Which of the following is a risk classification used by underwriters for life insurance?

Standard The three ratings classifications that denote the risk level of insureds are standard, substandard, and preferred. This classification system helps insurers to decide if an insured should pay a higher premium.

Which of the following entities established the Do-Not-Call Registry?

The Federal Trade Commission The FTC established the do-not-call list in order to protect consumers against unwanted solicitations.

Whose responsibility is it to make certain that an application for insurance is filled out completely and correctly?

The Producer Its is the responsibility of the producer (agent) to make sure an application for insurance is filled out completely and correctly.

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

The date of medical exam If the company acknowledges receipt of the premium with a conditional receipt, the policy is in effect on the date of the application or the date of the medical exam (whichever is later), provided that the applicant is found insurable at the rate applied for.

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application. Any unanswered questions need to be answered b4 the policy is issued. If a policy is issued with questions left unanswered, the contract will be interpreted as if the insurer waived its right to have an answer for the question and will not be able to deny coverage later because of unanswered questions

All of the following are requirements for life insurance illustrations EXCEPT: They must differentiate between guaranteed and projected amounts. They must be part of the contract. They may only be used as approved. They must identify nonguaranteed values.

They must be part of the contract. An illustration may not be altered by an agent and must clearly state that it is not part of the contract. It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values.

A producer agent must do all of the following when delivering a new policy to the insured EXCEPT A Collect any premium due. B Explain the rating procedures if the policy is rated differently than applied for. C Disclose commissions earned from the sale of the policy. D Explain the policy provisions, riders, and exclusions.

Disclose commissions earned from the sale of the policy. A producer must explain policy provisions, exclusions, and riders at the time of delivery, as well as the rating procedures, especially if the policy is rated differently than applied for. The producer must also collect any due premium and have the insured sign the statement of continued good health.

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent The policy can be effective as early as the date of the application, if the premium is submitted with the application and the policy is issued as applied for.

Which of the following best describes the MIB

It's a nonprofit organization that maintains underwriting information on applicants for life and health insurance. The Medical Information Bureau is a nonprofit trade organization which receives adverse medical information from insurance companies and maintains confidential medical impairment information on individuals