Unit 2 - Underwriting

While delivering the policy, the producer must obtain a signed document that the insured's health is the same as when he or she applied for the insurance policy. This document is called: a. an inspection report b. a delivery receipt c. a policy review d. a statement of good health

d. a statement of good health

The Fair Credit Reporting Act requires which of the following to be issued to all applications for life or health insurance? a. a notice to the application b. a financial disclosure statement c. a free credit check d. all of these must be issued to applicants

d. all of these must be issued to applicants

Which of the following individuals is NOT required to sign the application form? a. the insured b. the producer/agent c. the applicant (if not the insured) d. the beneficiary

d. the beneficiary

Under which of the following receipts is coverage effective as of the date of the application as long as the applicant is found to be insurable under the company's standard underwriting rules? a. conditional receipt b. binding receipt c. standard receipt d. acceptance receipt

a. conditional receipt

Which of the following is used to determine a consumer's eligibility for personal credit, insurance, or employment? a. consumer reports b. medical information bureau c. HIPPA d. consumer investigative reports

a. consumer reports

During the underwriting process, medical exams and testing are paid for by the: a. insurer b. agent/producer c. underwriter d. applicant

a. insurer

A risk that bears the same health, habits, and occupational characteristic as the persons on whose the morality table was based upon is known as a: a. standard risk b. preferred risk c. substandard risk d. declined risk

a. standard risk

The process of evaluating a risk to determine if the risk is one that the insurance company wishes to insure is also known as the: a. underwriting process b. application process c. decision making process d. insurance process

a. underwriting process

A general report in regard to the applicant's finances, health, character, work, hobbies, and other habits that is usually completed by interviewing friends and associates is known as a. a consumer report b. an investigative consumer report c. an attending physicians statement d. a Medical information bureau

b. an investigative consumer report

Which of the following is NOT included in the general form of the insurance application? a. type of policy and face amount being applied for b. height and weight c. occupation and business address d. beneficiary

b. height and weight

A risk that represents a chance of experiencing a loss that is below average and therefore favorable to the company is a: a. standard risk b. preferred risk c. substandard risk d. declined risk

b. preferred risk

The section of the application that includes information regarding the proposed insured's physical condition, medical history, and alcohol and drug use is known as: a. first part - general information b. second part - health information c. the entire application d. attending physician's statement

b. second part - health information

Which of the following imposes a requirement that the insurer must keep all medical information confidential and protect the applicant's privacy? a. consumer reports b. medical information bureau c. HIPPA d. consumer investigative reports

c. HIPPA

Which of the following factors is NOT prohibited from use in order to classify? a. race b. religion c. marital status d. place of residence

c. marital status

Which of the following is a non-profit insurance trade association that maintains underwriting information on applicants from hundreds of insurers? a. HIPPA b. consumer reports c. medical information bureau d. investigative consumer reports

c. medical information bureau

A part of the application that requires the agent to provide information regarding the proposed insured, such as habits, character, and relationship with the insured is known as a: a. binding receipt b. conditional receipt c. producer's report d. confidentiality report

c. producer's report

Which of the following is an above average risk of loss and unfavorable to an insurance company? a. standard b. preferred c. substandard d. declined

c. substandard

All of the following statements about completing the insurance application are correct EXCEPT: a. any change to an application must be initialed by the applicant b. the application form must be signed by bot the applicant, proposed insured (if not the applicant) and producer/agent c. the producer's report must be signed by both the applicant, proposed insured (if not the applicant) and producer/agent d. collecting the first premium with the application is the quickest way to get coverage in force

c. the producer's report must be signed by both the applicant, proposed insured (if not the applicant) and producer/agent

Most states allow backdating to be done on an insurance application for: a. up to 2 months b. up to 4 months c. up to 6 months d. up to 9 months

c. up to 6 months