Marketing, Underwriting and Policy Delivery

Question 1

What is a declined risk?

Answer 1

n application for insurance that has been turned down

Question 2

For applications submitted without premium, applicants must pay premium and complete a __________________________.

Answer 2

Statement Regarding Good Health.

Question 3

True or False: An agent may not make changes to a life insurance application.

Answer 3

True.

Technically, only the applicant may make changes, and only prior to the application being submitted.

Question 4

If proven untrue, may information obtained through a credit check be used to deny an application?

Answer 4

Untrue information obtained through a credit check may not be used to deny an application.

Question 5

What tables predict the probability of death?

Answer 5

Mortality tables

Question 6

When must the applicant be notified that consumer/credit background checks will be performed?

Answer 6

Within three days following a request for information

Question 7

When should the agent review and collect signatures on a Notice Regarding Replacement form?

Answer 7

No later than the time of application

Question 8

In order to represent an insurer, an agent must be ___________ by that company.

Answer 8

appointed by that company.

Question 9

Who is a substandard risk?

Answer 9

An individual with a higher than average risk

Question 10

True or False: The producer issues the insurance policy.

Answer 10

False.

Producers solicit appointments, complete applications, collect premiums, and submit applications for approval.

Question 11

Name some items that affect policy premium.

Answer 11

Age, gender, health, occupation, hobbies, habits, family health, and travel outside of the country

Question 12

When does coverage begin on a conditional receipt policy?

Answer 12

If the application is approved as applied for, coverage is immediately provided.

Question 13

List some approved policy delivery methods.

Answer 13

Certified registered mail, first-class mail with signed receipt, and personal delivery

Question 14

What information may be found in Section 1 of a life insurance policy?

Answer 14

Name, address, date of birth, salary, and occupation of the applicant

Question 15

An approval type conditional receipt, dated 6/15, is approved on 9/1 as applied for. When did coverage become effective?

Answer 15

On 9/1, the date the policy is approved

Question 16

When may changes to an application be made?

Answer 16

Changes may only be made prior to application submission.

Question 17

What individual has better than average risk?

Answer 17

A preferred risk

Question 18

What are the primary duties of an underwriter?

Answer 18

Assess risks, approve or deny applications, determine premiums, and protect the insurer against adverse selection

Question 19

Which would have a lower premium, a standard or substandard risk?

Answer 19

A standard risk would have a lower premium

Question 20

A ____________ application requires no information other than what is provided by the applicant.

Answer 20

nonmedical

Question 21

What is the rating method that increases premiums by increasing the age classification of the insured?

Answer 21

The step-up-in-age rating method

Question 22

What is a binding receipt?

Answer 22

One that provides immediate or unconditional coverage on the date the premium is received

Question 23

When should an agent review the possibility of various background checks such as credit, MIB, or HIV?

Answer 23

At the time of the original application

Question 24

What does the delivery of a policy to an insured constitute?

Answer 24

Policy issue and acceptance

Question 25

What are some of the negative results of submitting an incomplete application?

Answer 25

It's unprofessional, creates issuance delays, and may result in business lost to competitors or lost commissions.

Question 26

Who is the field underwriting agent?

Answer 26

The agent who determines which risks are desirable and submits them to the underwriting department for approval

Question 27

What is the purpose of the MIB?

Answer 27

To compare collected health information in order to avoid adverse selection

Question 28

What type of receipt provides coverage only on the date the application is approved?

Answer 28

An approval type conditional receipt

Question 29

Define the term warranty.

Answer 29

A statement made by an applicant that is guaranteed to be absolutely true

Question 30

What is the principal tool used in determining an individual's eligibility for insurance coverage?

Answer 30

The application

Question 31

How does the Percentage of Normal Rate method work?

Answer 31

By simply increasing the premium by a percentage of the standard rate

Question 32

If a conditional receipt requires the applicant to take a medical exam, when is the earliest date coverage may begin?

Answer 32

The date of the exam itself

Question 33

When does coverage begin if a policy has a conditional receipt based upon insurability?

Answer 33

Coverage begins on the receipt date provided the application is approved as applied for.

Question 34

True or False: Women statistically live longer than men; therefore, they have lower life insurance premiums.

Answer 34

True

Question 35

An insurability type conditional receipt, dated 6/15, is approved as applied for on 9/1. When did coverage begin?

Answer 35

6/15. With conditional type receipt, coverage is effective on date of the application if policy is issued as applied for.

Question 36

What provision begins on the date a policy is delivered to an insured?

Answer 36

The free-look provision

Question 37

The date listed on a receipt will always be a date that is _______ than the policy issue date.

Answer 37

earlier

Question 38

True or False: Anyone may gain access to MIB information.

Answer 38

False. Access is only available to approved company representatives/underwriters.

Question 39

An applicant's health history is usually found in ____________ of a life insurance policy.

Answer 39

Section II

Question 40

What is a morbidity table?

Answer 40

A table used to predict the probability of illness or disability

Question 41

What is the primary source of underwriting information?

Answer 41

The original application

Question 42

What is the most common method used to ensure a substandard risk?

Answer 42

Charging higher premiums

Question 43

Whenever a premium is paid by an applicant, the agent should provide a _________.

Answer 43

receipt.

Question 44

What does the Fair Credit Reporting Act allow?

Answer 44

It gives a consumer or applicant the right to dispute credit reporting information

Question 45

When is a Trial Application used?

Answer 45

When an application is submitted to the insurer without an initial premium

Question 46

Is coverage provided during the grace period?

Answer 46

Yes

Question 47

A _______ party contract requires three signatures.

Answer 47

third

Question 48

Identify the acronym: APS

Answer 48

Attending Physician's Statement

Question 49

Where would an agent record personal observations regarding the applicant?

Answer 49

In the agent report

Question 50

What is another name for an average or ordinary risk?

Answer 50

Standard risk

Question 51

Who pays for the cost of an applicant's medical exams and lab fees?

Answer 51

The insurer underwriting the application

Question 52

The MIB is an intercompany ______ bank that stores information collected from previous ______________.

Answer 52

The MIB is an intercompany DATA bank that stores the information collected from previous APPLICATIONS.

Question 53

Name the receipt that provides coverage "as long as a specific condition has been met or performed."

Answer 53

A conditional receipt

Question 54

When does the "Notice to the Applicant" regarding the Fair Credit Reporting Act need to be given?

Answer 54

At the time of application

Question 55

QID: 1669321Mark For Review | 55 of 59What methods are used to insure a substandard risk?

Answer 55

Higher premium, exclusion rider, lower benefit, and lower benefit time frame

Question 56

If requested by an applicant, what credit information must be provided to the applicant?

Answer 56

The information report, the source of information, and how to challenge the information

Question 57

Is signed authorization required from the applicant in order to test for the HIV virus?

Answer 57

Yes

Question 58

What are Representations?

Answer 58

Statements made by an applicant when answering questions on the application

Question 59

At policy delivery, what should the agent review with the insured?

Answer 59

Coverage, coverage effective date, provisions, beneficiaries, premium, exclusions, riders, and ownership rights