Life Underwriting

Question 1

In which of the following relationships would there NOT be an insurance interest?
A) parent to child
B) business partner to business partner
C) brother to sister
D) business owner to business customer

Answer 1

D) business owner to business customer

Question 2

Which of the following statements is CORRECT regarding an individual applying for life or health insurance?
A) the applicant waives all privacy rights
B) the applicant’s family medical history is always required
C) the applicant’s medical history is irrelevant
D) the applicant’s medical history may be analyzed and reported

Answer 2

D) the applicant’s medical history may be analyzed and reported

Question 3

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 waiver of premium
B) a replacement form
C) a good health statement
D) an exclusion

Answer 3

C) a good health statement

Question 4

Which of these is NOT considered to be a risk factor in life insurance underwriting?
A) number of children
B) health history
C) hobbies
D) occupation

Answer 4

A) number of children

Question 5

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

Answer 5

6

Question 6

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?

Answer 6

Fair Credit Reporting Act

Question 7

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

Answer 7

Preferred

Question 8

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) standard risk
B) preferred risk
C) unacceptable risk
D) substandard risk

Answer 8

Substandard risk

Question 9

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

Answer 9

Fraud

Question 10

When does a life insurance policy typically become effective?

Answer 10

When initial premium is collected and policy is issued

Question 11

All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT
A) agent’s report
B) medical information bureau (MIB)
C) inspection reports
D) national association of insurance underwriters

Answer 11

D) national association of insurance underwriters

Question 12

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

Answer 12

Claim will be paid if application is approved

Question 13

All of these are considered key factors in underwriting life insurance EXCEPT
A) tobacco use
B) health history
C) age
D) marital status

Answer 13

D) marital status

Question 14

Which of the following is a requirement for ANY change in an insurance application?
A) change must be initialed by the agent
B) change must be initialed by the applicant
C) change must be approved by the insurer
D) change must be notarized

Answer 14

B) change must be initialed by the applicant

Question 15

Which of the following would be a valid reason why a policy premium would be higher than the standard premium?
A) the insurer is not a member of the MIB
B) the agent quoted the wrong price
C) the insured does not have the necessary financial reserves
D) the insured does not meet established underwriting requirements

Answer 15

D) the insured does not meet established underwriting requirements