MARKETING, UNDERWRITING & POLICY DELIVERY

Question 1

the date listed on a receipt will always be a date that is ____ than the policy issue date

Answer 1

earlier

Question 2

an applicant’s health history is usually found in _____ of a life insurance policy

Answer 2

section ll

Question 3

where would an agent record personal observations regarding the applicant?

Answer 3

in the agent report

Question 4

what are some of the negative results of submitting an incomplete application

Answer 4

its unprofessional, creates issuance delays, and may result in business lost to competitors or in lost commissions

Question 5

what is a binding receipt?

Answer 5

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

Question 6

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

Answer 6

the free-look provision

Question 7

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

Answer 7

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

Question 8

what is another name for an average or ordinary risk?

Answer 8

standard risk

Question 9

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

Answer 9

on 9/1 the date the policy is approved

Question 10

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

Answer 10

nonmedical

Question 11

what does APS stand for

Answer 11

attending physician’s statement

Question 12

for applications submitted without premium, applicants must pay premium and complete a ________

Answer 12

statement regarding good health

Question 13

in order to represent an insurer, an agent must be ____ by that company

Answer 13

appointed

Question 14

how does the percentage of normal rate method work?

Answer 14

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

Question 15

a ____ party contract requires three signatures

Answer 15

a third party contract

Question 16

who is the field underwriting agent?

Answer 16

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

Question 17

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

Answer 17

coverage begins on the receipt date provided the application as applied for.

Question 18

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

Answer 18

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

Question 19

define the term warranty

Answer 19

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

Question 20

what is the purpose of the MIB?

Answer 20

to compare collected health information in order to avoid adverse selection

Question 21

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

Answer 21

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

Question 22

do producer issues the insurance policy

Answer 22

no, producers solicit appointments, complete applications, collect premiums, and submit applications for approval

Question 23

who is a substandard risk?

Answer 23

an individual with higher than average risk

Question 24

what are representations

Answer 24

statements made by an applicant when answering questions on the application

Question 25

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

Answer 25

an approval type condition receipt

Question 26

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

Answer 26

at time of original application

Question 27

what are the primary duties of an underwriter?

Answer 27

assess risks, approve or deny applications, determine premiums, and protect the surer against adverse selection

Question 28

when does coverage begin on a conditional receipt policy?

Answer 28

if the application is approved as applied for, coverage is immediately provided

Question 29

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

Answer 29

a conditional receipt

Question 30

what individual has better than average risk?

Answer 30

a preferred risk

Question 31

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

Answer 31

6/15 with conditional type receipt, coverage is effected on date of application if policy is issued as applied for

Question 32

what information may be found in section 1 of a life insurance policy?

Answer 32

personal information

Question 33

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

Answer 33

yes

Question 34

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

Answer 34

policy issue and acceptance

Question 35

name some items that effect policy premium

Answer 35

age, gender, health, occupation, hobbies, habits, family health, travel

Question 36

what tables predict the probability of death?

Answer 36

mortality tables

Question 37

what is a morbidity table?

Answer 37

a table used to predict the probability of illness or disability

Question 38

is coverage provided during the grace period?

Answer 38

yes

Question 39

list some approved policy delivery methods

Answer 39

certified registered mail, first class mail with signed receipt, a personal delivery

Question 40

list some approved policy delivery methods

Answer 40

certified registered mail, first class mail with signed receipt, and personal delivery

Question 41

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

Answer 41

within three days following a request for information

Question 42

when must the applicant be notified that consumer/credit background check will be perfomed?

Answer 42

within three days following a request for information

Question 43

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

Answer 43

the step-up-in-age rating method

Question 44

when is a trial application used?

Answer 44

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

Question 45

T or F: women statistically live longer than men; therefore, they have lower life insurance premiums.

Answer 45

true

Question 46

whenever a premium is paid by an applicant, the agent should provide a _____

Answer 46

receipt.

Question 47

T or F: an agent may not make changes to a life insurance application

Answer 47

true: technically, only the applicant may make changes, and only prior to the application being submitted

Question 48

T or F an agent may not make changes to a life insurance application

Answer 48

true, technically, only the applicant may make changes, and only prior to the application being submitted

Question 49

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

Answer 49

the application

Question 50

which would have a lower premium, a standard or substandard risk

Answer 50

premium

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

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

Answer 52

the insurer underwriting the application

Question 53

what does the fair credit reporting act allow

Answer 53

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

Question 54

what is declined risk

Answer 54

an application for insurance that has been turned down

Question 55

when should the agent review and collect signatures on a notice regarding replacement form?

Answer 55

no later than time of application

Question 56

what is the primary source of underwriting information

Answer 56

the original application

Question 57

the MIB is an intercompany ____ bank that stores information collected from previous _____

Answer 57

data bank, stores information collected from previous applications

Question 58

when may changes to an application be made

Answer 58

changes may only be made prior to application submission

Question 59

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

Answer 59

the date of the exam itself

Question 60

T or F: anyone may gain access to MIB information

Answer 60

false, access is only available to approved company representatives/underwriters.

Question 61

what is the most common method used to insure a substandard risk?

Answer 61

charging higher premiums

Question 62

when does the "notice to the applicant" regarding the fair credit reporting act need to given?

Answer 62

at the time of application

Question 63

what methods are used to insure a substandard risk?

Answer 63

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

Question 64

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

Answer 64

the date listed on a receipt will always be a date that is earlier than the policy issue date