Life Insurance Underwriting Basics

Questions and Answers

Sexual orientation, religious preference, and geographical location are not allowed to be used in the underwriting process.

True

Which is NOT a factor in the underwriting process of a life insurance application?

Sex of applicant

Credit report

Age of applicant

National origin (correct)

An individual most likely will have an insurable interest in insuring a person's life if:

A financial interest exists at the time of insured's death

A business relationship exists

There is any blood relationship

An economic interest exists for the continuance of the insured's life (correct)

The reason for backdating a policy is:

To obtain a premium rate based on earlier age Signup and view all the answers

With few exceptions, a person cannot purchase life insurance on another person without their:

Consent Signup and view all the answers

Information needed for the underwriting process can be obtained from which of these sources?

Attending Physicians Reports (APS) Signup and view all the answers

What must be given to a life insurance applicant when the agent receives an application and the initial premium?

Conditional receipt Signup and view all the answers

A signed statement of good health would be collected by a life producer at the time of?

Policy delivery Signup and view all the answers

What is considered to be the effective date of a life insurance contract if Mike applied and was issued a conditional receipt?

Date the conditional receipt was issued Signup and view all the answers

Life insurance underwriting would consider which of these factors as unimportant?

Marital status of the applicant Signup and view all the answers

Who supplies the privacy notice when an agent submits an application that reveals personal information regarding the applicant?

Agent Signup and view all the answers

A person who is a nonsmoker, of average weight and in excellent health would most likely be in which risk classification?

Preferred Signup and view all the answers

Which of these is NOT considered the responsibility of an agent in the underwriting process?

Choosing the final approval date Signup and view all the answers

The Medical Information Bureau consists of members from which group?

Insurance companies Signup and view all the answers

When does the agent give a premium receipt for a life insurance application?

When the initial premium has been collected with the application Signup and view all the answers

Which of these activities is considered hazardous to a life insurance underwriter?

Scuba diving Signup and view all the answers

A change in an insurance application requires what?

An initial made by the applicant Signup and view all the answers

During the underwriting process, all of these may be utilized to help determine a life insurance applicant's insurability EXCEPT a(n)

Eye exam Signup and view all the answers

What is the initial premium for a life insurance policy typically handled in what way?

It is typically obtained by the agent and sent to the insurer Signup and view all the answers

Which of these documents is signed by an applicant at policy delivery that certifies no change in health has occurred since the original application date?

Good health statement Signup and view all the answers

The Medical Information Bureau (MIB) provides what kind of information to an insurance company?

Applicants medical history Signup and view all the answers

Study Notes

Life Insurance Underwriting and Policy Issue

Sexual orientation, religious preference, and geographical location cannot be used in underwriting due to their classification as unfair discrimination.
National origin is not a factor in the life insurance underwriting process, while credit reports, age, and sex of the applicant are considered.
An insurable interest in a person's life is established if an economic interest exists for the continuation of the insured's life.
Backdating a policy is primarily done to obtain a premium rate based on the insured's earlier age.
Life insurance cannot be purchased on another person without their consent, with few exceptions.
Information for underwriting can be gathered from sources like Attending Physician Reports (APS).
A conditional receipt must be issued to a life insurance applicant when the agent collects the application and initial premium.
A signed statement of good health is collected at the time of policy delivery.
The effective date of a life insurance contract is the date the conditional receipt was issued if the applicant is found acceptable.
Marital status of the applicant is considered unimportant in life insurance underwriting.
Privacy notices related to personal information in applications are supplied by the agent.
A nonsmoker of average weight and in excellent health typically qualifies as a preferred risk.
Agents are not responsible for choosing the final approval date in the underwriting process.
The Medical Information Bureau is comprised of members from insurance companies, providing essential data for underwriting.
A premium receipt is issued by the agent when collecting the initial premium with the application.
Hazardous activities, such as scuba diving, are considered risky for life insurance underwriting.
Any changes in an insurance application require the applicant’s initials for validation.
Eye exams are not utilized to determine insurability during the underwriting process.
The initial premium for a life insurance policy is typically collected by the agent and sent to the insurer.
At policy delivery, applicants sign a good health statement certifying no health changes occurred since the application date.
The Medical Information Bureau (MIB) provides insurance companies with applicants' medical histories, which aids in risk assessment.

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Description

This quiz covers the essential principles of life insurance underwriting, including factors considered in the process and the ethical guidelines governing discrimination. Understand the implications of insurable interest and the procedures surrounding policy issuance and premium rate determination.