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Basic Principles Of Insurance > Life Insurance Underwriting & Policy Issue > Flashcards

Life Insurance Underwriting & Policy Issue Flashcards

1
Q

Field underwriting performed by the producer involves

A

Completing application and collecting premium

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2
Q

What guarantees that the statements supplied by an insurance applicant
are true?

A

Warranty

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3
Q

Which of the following types of information is NOT required for a life
insurance application?

A

Ethnicity

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4
Q

What happens when an insurance policy is backdated?

A

The policy effective date is earlier than the present

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5
Q

What is the purpose of the Medical Information Bureau (MIB)?

A

To help on the underwriter evaluate risk

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6
Q

Which of the following describes a person who is NOT acceptable by an
insurer at standard rates because of health history, occupation, or
hobbies?

A

Substandard

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7
Q

The principle of insurable interest, in regards to a life insurance contract,
is accurately described in which statement?

A

Insurable Interest can be based on the love and affection of individuals related by blood or law 

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8
Q

Which of the following is a requirement for ANY change in an insurance
application?

A

Change must be initialize by the applicant

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9
Q

Which of the following signatures is not required on an individual
insurance application?

A

Insurer

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10
Q

An insurance producer is often responsible for field underwriting durin
the application process. All of these are possible field underwriting role
EXCEPT

A

Providing commission information to the applicant

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11
Q

An attending physician’s statement would be appropriate for which life
insurance purpose?

A

At the request of the insurer to assist in the underwriting decision

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12
Q

Which of the following risk classifications charges the highest premium?

A

Substandard

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13
Q

The risk selection process is primarily given to which insurance company
department?

A

Underwriting

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14
Q

Which scenario would most life insurance policies exclude coverage for?

A

An individual who has a hobby racing cars once a month

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15
Q

The Medical Information Bureau consists of

A

Life and health insurance companies

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16
Q

Underwriters can acquire information from all of the following sources
EXCEPT

A

Genetic testing

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17
Q

An applicant’s character and personal habits can be obtained for
underwriting purposes from which source?

A

Investigative consumer report

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18
Q

How does a conditional receipt differ from a binding receipt?

A

Binding receipts always provide insurance which stars from the date of receipt

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19
Q

Which of the following does a life insurance policy summary normally
include?

A

The policy cash value

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20
Q

An insurer has a right to screen applicants for HIV in which of the
following ways?

A

Blood test for HIV

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21
Q

An insurance applicant with a below-average likelihood of loss is typically
considered to be a

A

Preferred risk

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22
Q

All of these are typically sources of underwriting information for life
health insurance EXCEPT

A

Disclosure authorization response

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23
Q

A field underwriter’s main task is

A

To ensure an applicant medical information is accurate and complete

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24
Q

Signatures for an insurance application MUST be obtained by th
producer from all of the following sources EXCEPT

A

Beneficiary

25
Q

A person who is a nonsmoker, of average weight, and in excellent health
would most likely be in which risk classification?

A

Preferred

26
Q

Most U.S. life insurance companies belong to the

A

Medical information bureau

27
Q

Which of the following is NOT an important reason for a life insurance
application?

A

The beneficiary must sign the policy

28
Q

Preferred risk policies with reduced premiums are issued by insurance
companies because the insured has

A

Better than average mortality & morbidity experience

29
Q

In which of the following relationships would there NOT be an insurable
interest?

A

Business owner to business customer

30
Q

An individual most likely will have an insurable interest in insuring a
person’s life if

A

An economic interest exist for the continuance of the insured life

31
Q

A change in an insurance application requires

A

And initial made by the applicant

32
Q

Which of the following risk classifications charges the lowest premium?

A

Preferred

33
Q

Which of the following statements is CORRECT regarding an individual
applying for life or health insurance?

A

The applicant medical history may be analyze and reported 

34
Q

How many months can a life insurance policy normally be backdated
from the date of application?

A

6

35
Q

What must an applicant do in order to authorize the release of an
attending physician report?

A

Sign a consent form

36
Q

All of these are considered sources of information that can assist an
underwriter in determining whether or not to accept a risk EXCEPT

A

The national Association of insurance on the writers

37
Q

An applicant intentionally lying to an insurance company on an
application in order to obtain a cheaper premium is an example

A

Fraud

38
Q

Statements made by an insurance applicant on an application are
considered to be

A

Representation

39
Q

A report which is based on creditworthiness and personal characteristics
that influences an insurance applicant’s eligibility for life and health
insurance is called a(n)

A

Consumer report

40
Q

All of these are considered key factors in underwriting life insurance except

A

Marital status

41
Q

In regards to a life insurance contract, which of the following statements
is NOT true regarding the concept of insurable interest?

A

Insurable interest can be established sufficiently by sentimental attachment alone

42
Q

When an insurance company requests an attending physician’s report,
the request must be accompanied by a 

A

copy of the signed authorization

43
Q

Upon policy delivery, which of the following must a producer have an
applicant sign if no initial premium was collected with the life insurance
application?

A

A good health statement

44
Q

Which of the following would be a valid reason why a policy premium
would be higher than the standard premium?

A

The insured does not meet the establish on the writing requirements

45
Q

When does a life insurance policy typically become effective?

A

When the initial premium is collected and the policy is issued

46
Q

Which of these is likely to occur when life or health insurance is being
applied for?

A

Medical history from the insured may be reviewed and reported 

47
Q

Which of the following pertains to the analysis of an applicant’s personal
information and determining whether insurance should be issued or
declined?

A

Underwriting

48
Q

An underwriter’s primary responsibility to an insurer is to protect against

A

Adverse selection

49
Q

Which of these is considered to be a document that describes the critical
segments of a life insurance policy?

A

Policy summary

50
Q

Which of these is NOT considered to be a risk factor in life insurance
underwriting?

A

Number of children 

51
Q

The object of underwriting is to

A

Avoid selecting disproportionate number of bad risk

52
Q

An applicant has revealed conditions that require more information.
Which of the following is needed next?

A

Attending physician statement

53
Q

An insurance company needs to obtain personal information from a third
party concerning an applicant. Which law do all insurers and their
producers need to comply with?

A

Fair credit reporting act

54
Q

Which of the following is NOT a risk classification that an underwriter
would use?

A

Dividend risk

55
Q

What are members of the Medical Information Bureau (MIB) required to
report?

A

Medical ailments discovered during the writing process

56
Q

Which of the following would be considered an underwriting duty of an
agent?

A

Completing all applications and collecting initial premiums

57
Q

What would happen if a life insurance applicant is given a conditional
receipt from an insurance agent and then dies the next day?

A

Claim will be paid if application is approved

58
Q

What is involved when a life insurance policy has been backdated?

A

Making the policy effective on an earlier date than the present

Basic Principles Of Insurance (11 decks)

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