Life Insurance Test 3

On May 8th a prospect filled out an application for a life insurance policy but paid no premium. The insurance company approved the application on May 14th and issued the policy on May 15th. The producer delivered the policy on May 26th and collected the first premium. The coverage became effective on:

May 26th

With proper notice and authorization, insurers may report underwriting information that an applicant lists on their application for Life insurance to the:

Medical Information Bureau (MIB

An insured's premium for Life insurance is based mainly upon their:

Risk classification

Insurable interest must exist:

At the time of application

A producer submits a completed and signed application to the underwriter along with the first premium check. After checking the results of the physical exam, the underwriter issues a 'rated' policy. Which of the following will not be required:

A new completed and signed application

If an applicant for a Life insurance policy is found to be a substandard risk, the insurance company is most likely to:

Charge an extra premium

All of the following are a part of a Life insurance policy, EXCEPT the:

Conditional Receipt

A prospect's statements made in the application for insurance constitute a part of which of the following?

Consideration Clause

Which federal law governs consumer investigative reports:

Fair Credit Reporting Act

If an existing client of a producer wants to buy another Life insurance policy, the producer should

Have the customer come in and complete and sign a new application

Once completed and signed by the applicant, a producer may change an application:

If the applicant initials the change

In the formation of a Life insurance contract, the special significance of a Conditional Receipt is that it:

Is intended to provide coverage on a date earlier than the date of the issuance of the policy

An insurable interest must exist when:

Policy ownership is transferred

A producer takes an application from a proposed insured without receiving payment of the first premium. The insurance company issues the policy and, when the producer visits the proposed insured to deliver it, she realizes that the health of the applicant has deteriorated significantly since the application was taken. The producer should:

Refuse to deliver the policy or to accept any premium offered

Statements made by an applicant for a Life insurance policy that are supposed to be true are referred to as

Representations

An applicant has been denied insurance coverage because of information contained in a consumer report. According to the Fair Credit Reporting Act, all of the following statements are true about this situation, EXCEPT:

The applicant has the right to obtain a copy of the consumer report directly from an insurance company that used the report

When giving a client a conditional receipt, which of the following is true?

The coverage will begin at earliest as of the date of application or when the client passes a physical, whichever is later

If an application for Life insurance is not complete:

The insurer will return it to the producer

Life insurance becomes effective when:

When the conditions in the conditional receipt are satisfied

A producer sends a completed and signed application along with the check for the initial premium to the underwriter, who notices that the applicant forgot to sign the check. When would coverage start?

When the producer delivers the policy and picks up a signed check along with a Statement of Continued Good Health

A producer completes an application for Life insurance and sends it to the underwriter who approves it and issues the policy. When is coverage effective:

When the producer delivers the policy and picks up the premium

Which of the following is true when the insurer issues a 'rated' policy:

it is considered to be a counteroffer