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LAH Course > Field and Home Office Underwriting and Policy Delivery > Flashcards

Field and Home Office Underwriting and Policy Delivery Flashcards

1
Q

What is the principal tool used in determining an individual’s eligibility for insurance coverage?

A

The application

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2
Q

True or False: The producer issues the insurance policy.

A

False.

Producers solicit appointments, complete applications, collect premiums, and submit applications for approval.

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3
Q

What are Representations?

A

Statements made by an applicant when answering questions on the application

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4
Q

An approval type conditional receipt, dated 6/15, is approved on 9/1 as applied for. When did coverage become effective?

A

On 9/1, the date the policy is approved

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5
Q

What is the rating method that increases premiums by increasing the age classification of the insured?

A

The step-up-in-age rating method

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6
Q

When should an agent review the possibility of various background checks such as credit, MIB, or HIV?

A

At time of original application

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7
Q

When must the applicant be notified that consumer/credit background checks will be performed?

A

Within three days following a request for information

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8
Q

Who is a substandard risk?

A

An individual with higher than average risk

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9
Q

What type of receipt provides coverage only on the date the application is approved?

A

An approval type conditional receipt

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10
Q

If proven untrue, may information obtained through a credit check be used to deny an application?

A

Untrue information obtained through a credit check may not be used to deny an application.

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11
Q

True or False: An agent may not make changes to a life insurance application.

A

True.

Technically, only the applicant may make changes, and only prior to the application being submitted.

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12
Q

What information may be found in Section 1 of a life insurance policy?

A

Name, address, date of birth, salary, and occupation of the applicant

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13
Q

Where would an agent record personal observations regarding the applicant?

A

In the agent report

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14
Q

What is the primary source of underwriting information?

A

The original application

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15
Q

Is signed authorization required from the applicant in order to test for the HIV virus?

A

Yes

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16
Q

Is coverage provided during the grace period?

A

Yes

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17
Q

Which would have a lower premium, a standard or substandard risk?

A

A standard risk would have a lower premium

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18
Q

What individual has better than average risk?

A

A preferred risk

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19
Q

An insurability type conditional receipt, dated 6/15, is approved as applied for on 9/1. When did coverage begin?

A

6/15. With conditional type receipt, coverage is effective on date of application if policy is issued as applied for.

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20
Q

A ____________ application requires no information other than what is provided by the applicant.

A

Nonmedical

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21
Q

Whenever a premium is paid by an applicant, the agent should provide a _________.

A

Receipt

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22
Q

What does the delivery of a policy to an insured constitute?

A

Policy issue and acceptance

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23
Q

What is the purpose of the MIB?

A

To compare collected health information in order to avoid adverse selection

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24
Q

An applicant’s health history is usually found in ____________ of a life insurance policy.

A

Section II

25
Q

At policy delivery, what should the agent review with the insured?

A

Coverage, coverage effective date, provisions, beneficiaries, premium, exclusions, riders, and ownership rights

26
Q

When should the agent review and collect signatures on a Notice Regarding Replacement form?

A

No later than time of application

27
Q

Who is the field underwriting agent?

A

The agent who determines which risks are desirable and submits them to the underwriting department for approval

28
Q

What methods are used to insure a substandard risk?

A

Higher premium, exclusion rider, lower benefit, and lower benefit time frame

29
Q

When does the “Notice to the Applicant” regarding the Fair Credit Reporting Act need to be given?

A

At the time of application

30
Q

The date listed on a receipt will always be a date that is _______ than the policy issue date.

A

Earlier

31
Q

A _______ party contract requires three signatures.

A

Third

32
Q

When may changes to an application be made?

A

Changes may only be made prior to application submission.

33
Q

What tables predict the probability of death?

A

Mortality tables

34
Q

Define the term warranty.

A

A statement made by an applicant that is guaranteed to be absolutely true

35
Q

Identify the acronym: APS

A

Attending Physician’s Statement

36
Q

If a conditional receipt requires the applicant to take a medical exam, when is the earliest date coverage may begin?

A

The date of the exam itself

37
Q

What is the most common method used to ensure a substandard risk?

A

Charging higher premiums

38
Q

When is a Trial Application used?

A

When an application is submitted to the insurer without an initial premium

39
Q

In order to represent an insurer, an agent must be ___________ by that company.

A

Appointed

40
Q

What provision begins on the date a policy is delivered to an insured?

A

The free-look provision

41
Q

True or False: Women statistically live longer than men; therefore, they have lower life insurance premiums.

A

True

42
Q

What is a binding receipt?

A

One that provides immediate or unconditional coverage on the date the premium is received

43
Q

When does coverage begin if a policy has a conditional receipt based upon insurability?

A

Coverage begins on the receipt date provided the application is approved as applied for.

44
Q

True or False: Anyone may gain access to MIB information.

A

False.

Access is only available to approved company representatives/underwriters.

45
Q

Who pays for the cost of an applicant’s medical exams and lab fees?

A

The insurer underwriting the application

46
Q

For applications submitted without premium, applicants must pay premium and complete a __________________________.

A

Statement Regarding Good Health.

47
Q

If requested by an applicant, what credit information must be provided to the applicant?

A

The information report, the source of information, and how to challenge the information

48
Q

List some approved policy delivery methods.

A

Certified registered mail, first class mail with signed receipt, and personal delivery

49
Q

Name the receipt that provides coverage “as long as a specific condition has been met or performed.”

A

A conditional receipt

50
Q

What is another name for an average or ordinary risk?

A

Standard risk

51
Q

What is a declined risk?

A

An application for insurance that has been turned down

52
Q

Name some items that affect policy premium.

A

Age, gender, health, occupation, hobbies, habits, family health, and travel outside of the country

53
Q

When does coverage begin on a conditional receipt policy?

A

If the application is approved as applied for, coverage is immediately provided.

54
Q

What are some of the negative results of submitting an incomplete application?

A

It’s unprofessional, creates issuance delays, and may result in business lost to competitors or lost commissions.

55
Q

What are the primary duties of an underwriter?

A

Assess risks, approve or deny applications, determine premiums, and protect the insurer against adverse selection

56
Q

What does the Fair Credit Reporting Act allow?

A

It gives a consumer or applicant the right to dispute credit reporting information

57
Q

What is a morbidity table?

A

A table used to predict the probability of illness or disability

58
Q

The MIB is an intercompany ______ bank that stores information collected from previous ______________.

A

The MIB is an intercompany DATA bank that stores the information collected from previous APPLICATIONS.

59
Q

How does the Percentage of Normal Rate method work?

A

By simply increasing the premium by a percentage of the standard rate

LAH Course (12 decks)

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