Field Underwriting (9%)

Question 1

Agent/Producer

Answer 1

legal representative of an insurance company. “producer” includes agents and brokers. “Agents” are agents of the insurer

Question 2

Applicant or proposed insured

Answer 2

person applying for insurance

Question 3

Consent

Answer 3

permission to do something

Question 4

Insurable interest

Answer 4

the policyowner facing the possibility of losing something of value in the event of aloss

Question 5

Insurance policy

Answer 5

contract between a policyowner and an insurance company which agress to pay the insured or the beneficiary for loss caused by specific events

Question 6

Insured

Answer 6

Person covered by the policy. may or MAY NOT be the policyowner

Question 7

Insurer (principal)

Answer 7

the company who issues an insurance policy

Question 8

Policyowner

Answer 8

person entitled to exercise the rights and privileges in the policy

Question 9

Premium

Answer 9

the money paid to the insurance company for the insurance policy.

Question 10

Insurer’s consideration

Answer 10

promise to pay for losses

Question 11

Insured’s consideration

Answer 11

the payment of premium and statements on the application

Question 12

Elements of a contract

Answer 12

1. Agreement - offer (by applicant) and acceptance (underwriter)
2. Consideration
3. Competent Parties (capable of entering)
4. Legal Purpose (not against public policy)

Question 13

Consideration (defined)

Answer 13

the binding force of any contract. Something of value that each party gives to the other

Question 14

Insurable interest

Answer 14

proven by:
1. Love/Affection
2. Economic/Financial loss

Question 15

Warranty

Answer 15

absolutely true statement. Breaching can be considered grounds for voiding policy or returning premium

Question 16

Representations

Answer 16

Believed to be true to the best of one’s knowledge

Question 17

Misrepresentations

Answer 17

untrue statements. could void a contrtact

Question 18

Material misrepresentations

Answer 18

misrepresentations that, if discovered, would alter the underwriting decision.

Question 19

Can intentional material misrepresentations be considered fraud?

Answer 19

Yes

Question 20

Conditional contract

Answer 20

requires that certain conditions be met in order to execute a contract (and before each party fulfills its obligations).

Question 21

Unilateral contract

Answer 21

only one party is bound to do anything.

Question 22

Contract of Adhesion

Answer 22

drawn up by one party (insurer) and accepted or rejected by the other (insured). No negotiations. “take it or leave it”

Question 23

Aleatory

Answer 23

an exchange of unequal amounts (premium is small compared to insurer payout)

Question 24

Who is responsible for ensuring that an application for insurance is complete and accurate to the best of the knowledge of the applicant

Answer 24

the agent

Question 25

Two ways to correct a mistake on an application

Answer 25

1. start over with a fresh application
2. draw a line through the incorrect answer and inster the correct one (applicant must initial the correct answer)

Question 26

All changes to an application…

Answer 26

must be initialed by the applicant or insured

Question 27

Application process

Answer 27

1. Complete and accurate information
2. Signatures
3. Changes (initialed) if necessary
4. Collection of initial premium (optional)
5. Submit to underwriting

Statement of continued good health required if premium is collected after application

Question 28

Replacing a health insurance policy with a new one requires:

Answer 28

1. ensuring current policy is NOT cancelled before new policy is issued
2. carefully comparing benefits, limitations, and exclutions found in the corrent and proposed replacement policies

Question 29

Sources of insurability information

Answer 29

1. Attending Physician Report (best for accurate information on applicant’s medical history)
2. MIB report (helps companies share adverse medical information on insureds)
3. Credit Reports (risk’s potential for loss)
4. Medical Exam Report (conducted by physicians/paramedics)

Question 30

What is required before an HIV exam?

Answer 30

Applicant’s written consent

Question 31

Investigative consumer reports

Answer 31

Similar to a regular consumer report except information is obtained from associates, friends, and neighbors.