Chapter 1 Flashcards
Completing the Application, Underwriting and Delivering the Policy (15 cards)
Which of the following is considered a field underwriter?
A. An Agent
B. An Insurer
C. An Adjuster
D. A company Underwriter
A. An Agent
Page 11
When must insurable interest exist in life insurance?
A. Death of the insured
B. Policy Delivery Date
C. Time of claim
D. Application date
D. Application date
Page 21
If no receipt is issued at the time of application, a statement of good health is usually required at the time of
A. Application
B. Policy Delivery
C. Policy Renewal
D. The paramedic’s report
B. Policy Delivery
Page 18
The Medical Information Bureau is
A. A government entity that reviews medical information
B. An association of physicians who write insurance rules
C. A directory of paramedical services and providers
D. A source of medical information to alert insurers to adverse medical history
D. A source of medical information to alert insurers to adverse medical history
Page 14
In an insurance contract, consideration refers to
A. A legal capacity
B. Exchange of something of value by both parties
C. Abiding by the law of ethics
D. An act by one party in exchange for a promise by the other
B. Exchange of something of value by both parties
Page 8
Over several years, a policyowner paid $10,000 in premiums for his insurance policy. When he suffered a loss, the insurance company paid out $50,000 in benefits. What characteristic of an insurance contract does this describe?
A. Unilateral
B. Adhesion
C. Conditional
D. Aleatory
D. Aleatory
A contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss.
Page 9
All of the following may have an insurable interest in the insured EXCEPT
A. The spouse
B. Insured’s children
C. The employer
D. The insured’s best friend
D. The insured’s best friend
Page 7
Which of the following would be the main source of underwriting information used by the company in the risk selection process?
A. Application
B. Warranty
C. MIB Report
D. Attending Physician’s statement
A. Application
Page 11
An insured submits the full premium along with a completed application, and the policy is issued 10 days later. When does coverage begin?
A. When the policy is received
B. After the Free-look period
C. On the date of the application
D. On the date that the policy is issued
C. On the date of the application
Page 18
What is the main responsibility of a company’s underwriting unit?
A. Controlling business written by new agents
B. Marketing and solicitation of insurance
C. Issuing policies
D. Risk selection and classification
D. Risk selection and classification
Page 11
Which of the following best describes the purpose of the USA PATRIOT Act with regards to the insurance industry?
A. To provide insurance to military service men and women and their dependents
B. To protect the public from the internal and external terror threats
C. To prevent terrorism activities through monitoring of financial transactions
D. To protect insurance companies from insurance fraud
C. To prevent terrorism activities through monitoring of financial transactions
Page 19
If the agent feels that there could be misrepresentation on the part of the applicant for insurance, what must the agent do?
A. Inform the insurance company
B. Change the applicant’s answer to what the agent knows is true
C. Erase the answer once the applicant submits the application
D. Refuse the applicant
A. Inform the insurance company
Page 9
Representations are statements made by the applicant that are
A. Considered to be true to the best of the applicant’s knowledge
B. Guaranteed to be true
C. Found to be false after further investigation
D. Immaterial to the actual acceptability of the insurance contract
A. Considered to be true to the best of the applicant’s knowledge
Page 9
If an agent fails to obtain an applicant’s signature on the insurance application, the agent must
A. Return the application to the applicant for signature
B. Send the application to the insurer with a note explaining the absence of signature
C. Sign the application for the applicant
D. Sign the application as an agent, stating that all the answers have been verified
A. Return the application to the applicant for signature
Page 12
Which of the following includes information regarding a person’s credit, character, reputation, and habits?
A. Agent’s report
B. MIB Report
C. Consumer Report
D. Fair Credit Report
C. Consumer Report
Page 14
