MARKETING, UNDERWRITING & POLICY DELIVERY Flashcards
the date listed on a receipt will always be a date that is ____ than the policy issue date
earlier
an applicant’s health history is usually found in _____ of a life insurance policy
section ll
where would an agent record personal observations regarding the applicant?
in the agent report
what are some of the negative results of submitting an incomplete application
its unprofessional, creates issuance delays, and may result in business lost to competitors or in lost commissions
what is a binding receipt?
one that provides immediate or unconditional coverage on the date the premium is received
what provision begins on the date a policy is delivered to an insured?
the free-look provision
if requested by an applicant, what credit information must be provided to the applicant?
the information report, the source of information, and how to challenge the information
what is another name for an average or ordinary risk?
standard risk
an approval type conditional receipt, dated 6/15, is approved on 9/1 as applied for. when did coverage become effective?
on 9/1 the date the policy is approved
A _____ application requires no information other than what is provided by the applicant
nonmedical
what does APS stand for
attending physician’s statement
for applications submitted without premium, applicants must pay premium and complete a ________
statement regarding good health
in order to represent an insurer, an agent must be ____ by that company
appointed
how does the percentage of normal rate method work?
by simply increasing the premium by a percentage of the standard rate
a ____ party contract requires three signatures
a third party contract
who is the field underwriting agent?
the agent who determines which risks are desireable and submits them to the underwriting department for approval
when does coverage begin if a policy has a conditional receipt based upon insurability?
coverage begins on the receipt date provided the application as applied for.
at policy delivery, what should the agent review with the insured?
coverage, coverage effective date, provisions, beneficiaries, premium, exclusions, riders and ownership rights
define the term warranty
a statement made by an applicant that is guaranteed to be absolutely true
what is the purpose of the MIB?
to compare collected health information in order to avoid adverse selection
if proven untrue, may information obtained through a credit check be used to deny an application?
untrue information obtained through a credit check may not be used to deny an application
do producer issues the insurance policy
no, producers solicit appointments, complete applications, collect premiums, and submit applications for approval
who is a substandard risk?
an individual with higher than average risk
what are representations
statements made by an applicant when answering questions on the application
what type of receipt provides coverage only on the date the application is approved?
an approval type condition receipt
when should an agent review the possibility of various background checks such a credit, MIB, or HIV?
at time of original application
what are the primary duties of an underwriter?
assess risks, approve or deny applications, determine premiums, and protect the surer against adverse selection
when does coverage begin on a conditional receipt policy?
if the application is approved as applied for, coverage is immediately provided
name the receipt that provides coverage “as long as a specific condition has been met or performed.”
a conditional receipt
what individual has better than average risk?
a preferred risk
an insurability type conditional receipt, dated 6/15, is approved as applied for on 9/1. when did coverage begin?
6/15 with conditional type receipt, coverage is effected on date of application if policy is issued as applied for
what information may be found in section 1 of a life insurance policy?
personal information
is signed authorization required from the applicant in order to test for the HIV virus?
yes
what does the delivery of a policy to an insured constitute?
policy issue and acceptance
name some items that effect policy premium
age, gender, health, occupation, hobbies, habits, family health, travel
what tables predict the probability of death?
mortality tables
what is a morbidity table?
a table used to predict the probability of illness or disability
is coverage provided during the grace period?
yes
list some approved policy delivery methods
certified registered mail, first class mail with signed receipt, a personal delivery
list some approved policy delivery methods
certified registered mail, first class mail with signed receipt, and personal delivery
when must the applicant be notified that consumer/credit background checks will be performed?
within three days following a request for information
when must the applicant be notified that consumer/credit background check will be perfomed?
within three days following a request for information
what is the rating method that increases premiums by increasing the age classification of the insured?
the step-up-in-age rating method
when is a trial application used?
when an application is submitted to the insurer without an initial premium
T or F: women statistically live longer than men; therefore, they have lower life insurance premiums.
true
whenever a premium is paid by an applicant, the agent should provide a _____
receipt.
T or F: an agent may not make changes to a life insurance application
true: technically, only the applicant may make changes, and only prior to the application being submitted
T or F an agent may not make changes to a life insurance application
true, technically, only the applicant may make changes, and only prior to the application being submitted
what is the principal tool used in determining an individual’s eligibility for insurance coverage
the application
which would have a lower premium, a standard or substandard risk
premium
who pays for the cost of an applicant’s medical exams and lab fees
the insurer underwriting the application
who pays for the cost of an applicant’s medical exams and lab fees?
the insurer underwriting the application
what does the fair credit reporting act allow
it gives a consumer or applicant the right to dispute credit reporting information
what is declined risk
an application for insurance that has been turned down
when should the agent review and collect signatures on a notice regarding replacement form?
no later than time of application
what is the primary source of underwriting information
the original application
the MIB is an intercompany ____ bank that stores information collected from previous _____
data bank, stores information collected from previous applications
when may changes to an application be made
changes may only be made prior to application submission
if a conditional receipt requires the applicant to take a medical exam, when is the earliest date coverage may begin
the date of the exam itself
T or F: anyone may gain access to MIB information
false, access is only available to approved company representatives/underwriters.
what is the most common method used to insure a substandard risk?
charging higher premiums
when does the “notice to the applicant” regarding the fair credit reporting act need to given?
at the time of application
what methods are used to insure a substandard risk?
higher premium, exclusion rider, lower benefit, and lower benefit time frame
the date listed on a receipt will always be a date that is _______ than the policy issue date
the date listed on a receipt will always be a date that is earlier than the policy issue date
