Unit 7: Policy Insurance And Delivery Flashcards
Brenda decides that she wants to buy a policy. She fills out the application but does not pay the initial premium. What kind of receipt will Brenda receive? A. Conditional receipt B. Binding receipt C. Inspection receipt D. Premium receipt
C
Camille decides to buy a policy. She pays the first premium, and the producer issues a receipt and tells her that she is covered immediately, unless the company decides she would have been a substandard risk. What kind of receipt did Camille receive? A. Conditional receipt B. Binding receipt C. Inspection receipt D. Premium receipt
A
What kind of receipt is most commonly used in life insurance? A. Conditional receipt B. Binding receipt C. Inspection receipt D. Premium receipt
A
Insurers sometimes require personal delivery so that
A. The producer has another opportunity to sell policies
B. The producer can verify the insureds good health at the time of delivery
C. The insurer can save on mailing supplies
D. The first premium may be collected
B
If payment of a valid death claim is delayed, what is the usual reason?
A. A dispute over the validity of the claim
B. A dispute over the amount of the claim
C. The insurer has not received proper notification of the death
D. The insurer has not received proper notification of the policy
C
Lee applies for a policy, pays the initial premium, and receives a conditional receipt on March 14. On March 15, he passes the medical exam with flying colors. On March 16, and undiagnosed brain aneurysm bursts, killing Lee instantly. On March 17, the insurer receives the results of the medical exam, which includes no information about the aneurysm. On March 19, the insurer receives the notice of claim. The insurer will
A. Pay the claim
B. Return the premium
C. Pay the claim plus the amount of the first premium
D. Pay the claim minus a processing fee
A
Alice decides to buy a policy. She pays the first premium; the producer issues a receipt and tells her that she is covered immediately, until she is notified that the policy is either issued or declined. What kind of receipt has Alice received? A. Conditional receipt B. Binding receipt C. Inspection receipt D. Premium receipt
B
Rich applies for a policy, pays the initial premium, and receives a binding receipt on Friday, September 1. On Monday, September 4, the underwriting department decides not to issue the policy and places the file in a pile for notification letters to be sent out at the end of the week. On Wednesday, September 6, Rich is killed in an auto accident. On Thursday, September 7, the insurer receives a notice of the claim. The insurer will
A. Return the premium and not pay the claim because the underwriting decision had been made
B. Return the premium and not pay the claim because death occurred before the policy was issued
C. Pay the claim because a binding receipt ensures coverage until the potential insured is notified of a rejection
D. Pay the claim because any receipt assures coverage until the potential insured is notified of a rejection
C
Brit purchases a policy and tells the producer he wants immediate coverage, regardless of what the underwriting outcome is. To meet Brit’s demand, the producer most likely will accept the premium and
A. Set up a temporary insurance agreement
B. Issue an inspection receipt
C. Issue a binding receipt
D. Issue a conditional receipt
A
A policy may be issued in all of the following ways EXCEPT
A. As applied for
B. As a modified or amended policy
C. An an exchange policy, covering someone other than the original applicant
D. With a waiver excluding death by a certain cause
C
Which of the following statements is not true?
A. Replacement is illegal
B. Replacement is the purchase of one life insurance policy to replace another
C. Replacement laws are designed to protect the interests of the life insurance purchasers
D. Replacement laws concern themselves with the use of false and misleading statements used in the sale of insurance
A
