Chapter Three Quiz Flashcards
In classifying a risk, the Home Office underwriting department will look at all of the following except?:
Applicant’s past income
All of the following are business uses of life insurance except:
Funding against company’s general financial loss
The agent is known as the field “field underwriter” because of the information the agent gathers for the insurer. This helps the insurer:
Pre-select applicants that would present the lowest risk of loss for the insurer
Which of the following is the best reason to purchase life insurance rather than an annuity?
To create an estate
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to:
Charge a higher premium
An applicant who receives a preferred risk classification qualifies for:
Lower premiums than a person who receives a standard risk
In regards to life insurance contracts, the temporary term is:
The period of time during which a binding receipt covers a policyholder
All of the following statements concerning the use of life insurance as an Executive Bonus are correct except:
The policy is owned by the company
An individual applied for an insurance policy and paid the initial premium. The insurer ussied a conditional reciept. 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
What is the main responsibility of a company’s underwriting unit?
Risk selection
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
The Federal Fair Credit Reporting Act:
Regulates consumer reports
