Life Insurance Underwriting-6

Question 1

Purpose of underwriting

Answer 1

Used by an insurance company to determine whether or not an applicant is insurable and if so how much to charge for premiums

Question 2

7 Most common sources of underwriting info include

Answer 2

The application 
The medical report 
Attending physicians statement 
The medical information bureau 
Special questionnaires 
Inspection reports 
Credit reports

Question 3

Credit reports

Answer 3

Applicants credit history

Question 4

Warranty

Answer 4

Statements that are guaranteed to be literally true

If any info is false can cause void

Question 5

Representation

Answer 5

Statements made my applicants that are substantially true to the best of their knowledge

Question 6

Inspection reports

Answer 6

Provides info about the applicants character, lifestyle, and financial stability

Question 7

Medical information bureau

Answer 7

Nonprofit trade organization which maintains medical info about individuals

Question 8

USA patriot act

Answer 8

Enacted in 2001

Requires insurance companies to establish formal anti money laundering programs

Question 9

Fair credit reporting act of 1970 mins

Answer 9

Regulates the way credit info is collected and used to protect the rights of consumers for whom an inspection or credit report has been requested

Question 10

Buyers guide

Answer 10

Provides general info about the types of life insurance policies available

Question 11

Policy summary

Answer 11

Provides specific info about the policy purchased such as premium and benefits

Question 12

Conditional receipt

Answer 12

Denotes that coverage will be effective once certain conditions are met

Question 13

Binding receipt

Answer 13

Provides coverage from the date of the application regardless of whether the applicant is insurable

Question 14

The effective date is important for two reasons:

Answer 14

Identifies when the coverage is effective

Establishes the date by which future annual premiums must be paid

Question 15

Backdating

Answer 15

Process of predating the application a certain number of months to achieve a Lower premium

Question 16

Constructive delivery

Answer 16

Occurs if the insurance company intentionally relinquishes all control over the policy and turns it over to someone acting for the policyowner

Question 17

The statement of good health

Answer 17

Verifies that the insured has not become ill injured or disabled during the policy approval process

Question 18

Personal delivery

Answer 18

Is a good practice as it allows the producer to explain the coverage to the insured