1. Chp Quiz - Book

Question 1

1. Which of the following is considered a field underwriter?

A. An agent
B. An insurer
C. An adjuster
D. A company underwriter

Answer 1

A. An agent

Question 2

2. When must insurable interest exist in life insurance?

A. Death of the insured
B. Policy delivery date
C. Time of claim
D. Application date

Answer 2

D. Application date

Question 3

3. If no receipt is issued at the time of application, a statement of good health is usually
   required at the time of

A. Application.
B. Policy delivery.
C. Policy renewal.
D. The paramedic’s report.

Answer 3

B. Policy delivery

Question 4

4. The Medical Information Bureau is

A. A government entity that reviews medical information.
B. An association of physicians who write insurance rules.
C. A directory of paramedical services and providers.
D. A source of medical information to alert insurers to adverse medical history.

Answer 4

D. A source of medical information to alert insurers to adverse medical history

Question 5

5. In an insurance contract, consideration refers to

A. A legal capacity.
B. Exchange of something of value by both parties.
C. Abiding by the laws of ethics.
D. An act by one party in exchange for a promise by the other

Answer 5

B. Exchange of something of value by both parties

Question 6

6. Over several years, a policyowner paid $10,000 in premiums for his insurance policy. When
   he suffered a loss, the insurance company paid out $50,000 in benefits. What characteristic of
   an insurance contract does this describe?

A. Unilateral
B. Adhesion
C. Conditional
D. Aleatory

Answer 6

C. Conditional

Question 7

7. All the following may have an insurable interest in the insured EXCEPT

A. The spouse.
B. Insured’s children.
C. The employer.
D. Insured’s best friend

Answer 7

D. Insured’s best friend

Question 8

8. Which of the following would be the main source of underwriting information used by the
   company in the risk selection process?

A. Application
B. Warranty
C. MIB report
D. Attending physician’s statement

Answer 8

B. Warranty

Question 9

9. An insured submits the full premium along with a completed application, and the policy is
   issued 10 days later. When does the coverage begin?

A. When the policy is received
B. After the free-look period
C. On the date of the application
D. On the date the policy is issued

Answer 9

C. On the date of the application

Question 10

10. What is the main responsibility of a company’s underwriting unit?

A. Controlling business written by new agents
B. Marketing and solicitation of insurance
C. Issuing policies
D. Risk selection and classification

Answer 10

D. Risk selection and classification

Question 11

11. Which of the following best describes the purpose of the USA PATRIOT Act with regards to
    the insurance industry?

A. To provide insurance to military service men and women and their dependents
B. To protect the public from the internal and external terror threats
C. To prevent terrorism activities through monitoring of financial transactions
D. To protect insurance companies from insurance fraud

Answer 11

C. To prevent terrorism activities through monitoring of financial transactions

Question 12

12. If the agent feels that there could be misrepresentation on the part of the applicant for
    insurance, what must the agent do?

A. Inform the insurance company
B. Change the applicant’s answer to what the agent knows is true
C. Erase the answer once the applicant submits the application
D. Refuse the applicant

Answer 12

A. Inform the insurance company

Question 13

13. Representations are statements made by the applicant that are

A. Guaranteed to be true.
B. Considered true to the best of the applicant’s knowledge.
C. Found to be false after further investigation.
D. Immaterial to the actual acceptability of the insurance contract.

Answer 13

B. Considered true to the best of the applicant’s knowledge.

Question 14

14. If an agent fails to obtain an applicant’s signature on the insurance application, the agent
    must

A. Return the application to the applicant for signature.
B. Send the application to the insurer with a note explaining the absence of signature.
C. Sign the application for the applicant.
D. Sign the application as an agent, stating that all the answers have been verified.

Answer 14

A. Return the application to the applicant for signature

Question 15

15. Which of the following includes information regarding a person’s credit, character,
    reputation, and habits?

A. Agent’s report
B. MIB report
C. Consumer report
D. Fair Credit report

Answer 15

C. Consumer report