Field Underwriting, Application, Premiums, and Receipts

If a premium payment has not been given with the application, the policy becomes effective only when the producer delivers the policy and:

Explains its provisions, secures the initial premium, and a signed statement of continued good health

The agent must provide the buyer's guide to the applicant:

When the policy is delivered

Which of the following statements about a temporary insurance agreement is CORRECT?

It provides temporary coverage until an application is rejected or the policy is issued.

How many months can a life insurance policy be backdated?

6 months

Telemarketers may call phone numbers not on the Do Not Call List from:

8am to 9pm

Both the producer and the ___________ are required to sign the insurance application.

Applicant

A life insurance application can usually be backdated for a maximum of how many months?

6 months

At what age may a minor purchase a life or health insurance contract?

15

Which of the following correctly describes the penalty applied to a company for calling a person whose phone number is on the Do Not Call List? Select one: a. Fine in the amount of $16,000 b. Fine in the amount of $40,000 c. Fine in the amount of $100,000 d. Fine in the amount of $1,000,000

: Fine in the amount of $40,000

Which of the following does not demonstrate constructive delivery? Select one: a. The agent mails the policy to the insured b. The insurer mails the policy to the agent, who in turn, mails the policy to the insured c. A conditional receipt is issued to the applicant d. The insurer mails the policy to the insured

A conditional receipt is issued to the applicant

According to the U.S. PATRIOT Act, which of the following is money laundering? Select one: a. Fraudulent use of public funds b. Computer crimes c. Illegal exportation of controlled munitions d. All of the above

All of the above

Which of the following is a true statement? Select one: a. If an applicant needs to makes changes in their application, the agent should create a new form. b. After the applicant's signature, no changes can be made to that particular application. c. Any changes in the application must be signed by both the applicant and the agent. d. Any changes in the application must be initialed by the applicant.

Any changes in the application must be initialed by the applicant.

Anna applied for a $1 million life insurance policy and paid the first premium. Later she was declared uninsurable. Her agent gave her a receipt that guarantees coverage until the insurer formally rejects the application. Which type of receipt did Anna receive?

Binding

Which of the following correctly identifies the two types of premium receipts?

Conditional and binding

David signs an application for a $50,000 life policy, pays the initial premium, and receives a conditional receipt. If he were killed in an automobile accident one day later:

His beneficiary would receive $50,000, if the application qualified him for the policy for which he applied.

Which of the following correctly identifies the two types of conditional receipts?

Insurability and approval

Coverage begins on the application date or date of medical exam for which of the following? Select one: a. Insurability receipt b. Nonnegotiable receipt c. Premium receipt d. Approval receipt

Insurability receipt

In Ray's application for life insurance an applicant failed to complete one part regarding family history. In his statement, the agent described the family as long-lived and healthy. If an insurance company accepts the application in the incomplete form and the applicant for coverage dies young from a cardiac condition that had taken the lives of both his parents before age 50, will the company deny or accept the claim of the beneficiaries?

It will pay the claim, because in accepting the application, it waived its right to the missing information.

Wesley fills out an application for a life insurance policy and submits it to the agent on January 5th. He does not include the first premium payment. Wesley undergoes the required medical examination on January 7th. The insurance company approves Wesley's application on January 15th. Wesley's agent delivers the policy to Wesley on January 17th. At this time, Wesley writes out a check for the initial premium. On what date is Wesley's policy effective? Select one: a. January 5th b. January 7th c. January 15th d. January 17th

January 17th

Sam submits an application with initial premium for a life insurance policy on July 6th. The agent issues Sam a conditional receipt at this time. Sam takes the required medical exam on July 10th. The insurer approves the policy on August 1st, and the agent delivers the policy to Sam on August 10th. Which day did Sam's coverage begin?

July 10th

Margaret makes a change to her insurance application after completing it. Who must initial her change and sign the contract?

Margaret and the agent

Marge and Ben purchase an insurance policy to cover their family. Who is required to sign the application?

Marge and Ben

If required by the insurer, the statement of good health must be collected by the producer at the time of:

Policy delivery

All of the following statements are true regarding insurance application procedures, EXCEPT:

Producers can fill in any missing information they discover on the application.

Field underwriting ________ adverse selection.

Reduces

The agent may be required to collect a _______ from the policyowner upon policy delivery.

Statement of good health

Who administers the National Do Not Call Registry?

The Federal Trade Commission

Of the following, who must explain the reason for premium increases to a life insurance applicant?

The agent

Who completes field underwriting?

The agent

If a company issues a conditional receipt to an applicant who has paid an initial premium for a policy that does not require a medical examination:

The applicant is immediately covered.

All of the following correctly demonstrate policy delivery, EXCEPT: Select one: a. The insurance company mails the policy to the policyowner b. The insurance agent delivers the policy in-person c. The application is approved by the underwriter d. The insurance company mails the policy to the insurance agent, who in turn, delivers the policy to the policyowner

The application is approved by the underwriter

An individual signed an application for a $100,000 life insurance policy and paid the first premium on January 1. The agent issued an insurability receipt. A week later, the required medical examination proves the person insurable. If the person dies before the insurer approves the application:

The coverage will be retroactively effective.

Constructive delivery has occurred in all of the following, EXCEPT: Select one: a. The insurer mails the policy to the producer, who mails the policy to the insured b. The producer mails the policy to the insured c. The insurer mails the policy directly any representative of the policy d. The producer receives the application and issues a conditional receipt

The producer receives the application and issues a conditional receipt

Which of the following individual's missing signature deems a life insurance application incomplete? a. The primary beneficiary b. The executive officer of the insurance company c. The prospective adult insured d. The underwriter

The prospective adult insured

Coverage is effective: Select one: a. With collection of the initial premium, approval of the application, policy issuance and delivery b. Upon collection of the application only c. Upon collection of the initial premium only d. When the applicant makes an offer to the insurer

With collection of the initial premium, approval of the application, policy issuance and delivery