Podcast
Questions and Answers
All of these are typically sources of underwriting information for life or health insurance EXCEPT?
All of these are typically sources of underwriting information for life or health insurance EXCEPT?
When does a life insurance policy typically become effective?
When does a life insurance policy typically become effective?
Which of the following pertains to the analysis of an applicant's personal information and determining whether insurance should be issued or declined?
Which of the following pertains to the analysis of an applicant's personal information and determining whether insurance should be issued or declined?
Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies?
Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies?
Signup and view all the answers
Which of these is likely to occur when life or health insurance is being applied for?
Which of these is likely to occur when life or health insurance is being applied for?
Signup and view all the answers
Which of these is considered to be a document that describes the critical segments of a life insurance policy?
Which of these is considered to be a document that describes the critical segments of a life insurance policy?
Signup and view all the answers
What is the purpose of the Medical Information Bureau (MIB)?
What is the purpose of the Medical Information Bureau (MIB)?
Signup and view all the answers
Which of the following does a life insurance policy summary normally include?
Which of the following does a life insurance policy summary normally include?
Signup and view all the answers
All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT?
All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT?
Signup and view all the answers
Which of the following signatures is not required on an individual insurance application?
Which of the following signatures is not required on an individual insurance application?
Signup and view all the answers
What is involved when a life insurance policy has been backdated?
What is involved when a life insurance policy has been backdated?
Signup and view all the answers
Which scenario would most life insurance policies exclude coverage for?
Which scenario would most life insurance policies exclude coverage for?
Signup and view all the answers
Underwriters can acquire information from all of the following sources EXCEPT?
Underwriters can acquire information from all of the following sources EXCEPT?
Signup and view all the answers
An insurance applicant with a below-average likelihood of loss is typically considered to be a?
An insurance applicant with a below-average likelihood of loss is typically considered to be a?
Signup and view all the answers
Which of the following would be a valid reason why a policy premium would be higher than the standard premium?
Which of the following would be a valid reason why a policy premium would be higher than the standard premium?
Signup and view all the answers
A field underwriter's main task is?
A field underwriter's main task is?
Signup and view all the answers
An applicant's character and personal habits can be obtained for underwriting purposes from which source?
An applicant's character and personal habits can be obtained for underwriting purposes from which source?
Signup and view all the answers
Which of the following would be considered an underwriting duty of an agent?
Which of the following would be considered an underwriting duty of an agent?
Signup and view all the answers
Preferred risk policies with reduced premiums are issued by insurance companies because the insured has?
Preferred risk policies with reduced premiums are issued by insurance companies because the insured has?
Signup and view all the answers
Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application?
Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application?
Signup and view all the answers
An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of?
An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of?
Signup and view all the answers
An attending physician's statement would be appropriate for which life insurance purpose?
An attending physician's statement would be appropriate for which life insurance purpose?
Signup and view all the answers
Which of these is NOT considered to be a risk factor in life insurance underwriting?
Which of these is NOT considered to be a risk factor in life insurance underwriting?
Signup and view all the answers
How many months can a life insurance policy normally be backdated from the date of application?
How many months can a life insurance policy normally be backdated from the date of application?
Signup and view all the answers
An insurer has a right to screen applicants for HIV in which of the following ways?
An insurer has a right to screen applicants for HIV in which of the following ways?
Signup and view all the answers
The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement?
The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement?
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?
A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification?
Signup and view all the answers
A change in an insurance application requires?
A change in an insurance application requires?
Signup and view all the answers
All of these are considered key factors in underwriting life insurance EXCEPT?
All of these are considered key factors in underwriting life insurance EXCEPT?
Signup and view all the answers
Statements made by an insurance applicant on an application are considered to be?
Statements made by an insurance applicant on an application are considered to be?
Signup and view all the answers
An individual most likely will have an insurable interest in insuring a person's life if?
An individual most likely will have an insurable interest in insuring a person's life if?
Signup and view all the answers
What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day?
What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day?
Signup and view all the answers
In which of the following relationships would there NOT be an insurable interest?
In which of the following relationships would there NOT be an insurable interest?
Signup and view all the answers
Study Notes
Underwriting Information Sources
- Sources for underwriting information include consumer reports, Medical Information Bureau (MIB) reports, and attending physician's statements (APS); however, disclosure authorization responses are not typically a source.
- Genetic testing is not considered a source for underwriters when acquiring information about applicants.
Life Insurance Policy Effectiveness
- A life insurance policy becomes effective when the initial premium is collected and the policy is issued.
- Backdating a policy allows setting the effective date before the current application date, commonly allowed for up to six months.
Underwriting Processes
- Underwriting is the process of analyzing an applicant's personal information to determine whether insurance should be issued or declined.
- Substandard risk refers to individuals unacceptable at standard rates due to health history, occupation, or hobbies, whereas preferred risk indicates those with a lower likelihood of loss.
Insurance Documentation
- A policy summary includes critical information such as the policy's cash value, which helps applicants understand coverage details.
- Attending physician's statements assist in underwriting decisions at the insurer's request, not the applicant's.
Risk Classification and Premiums
- The Medical Information Bureau (MIB) assists underwriters in evaluating risk and determining appropriate premium rates.
- Policies with reduced premiums are issued to those with better than average mortality or morbidity experience.
Application and Signatures
- Certain signatures are required on an insurance application, including the applicant and producer, but not the insurer.
- A good health statement is necessary if no initial premium was collected at the time of application delivery.
Fraud and Misrepresentation
- Fraud occurs when an applicant lies to obtain a better premium, violating the principle of honesty in the application process.
- Statements made by applicants are considered representations rather than guarantees or warranties.
Insurable Interest
- Insurable interest is established based on economic interest or love and affection in relationships, impacting the validity of insurance contracts.
- No insurable interest exists in business relationships where economic interest is absent, such as between a business owner and a customer.
Underwriting Factors and Exclusions
- Key factors influencing underwriting include tobacco use, health history, and age; marital status is generally not a key factor.
- Underwriting likely excludes individuals with risky hobbies, such as car racing, and requires information regarding applicants' character, often obtained through investigative consumer reports.
Conditional Receipts and Claims
- If an applicant dies after receiving a conditional receipt, claims will be paid upon approval of the application if money was received.
Miscellaneous
- Common misunderstandings arise about who is considered an acceptable risk, with factors like health history and lifestyle being scrutinized heavily.
- Agents are responsible for completing applications and collecting premiums, ensuring accurate information is submitted to the insurer.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of life insurance underwriting and policy issuance with this set of flashcards. Topics include sources of underwriting information and when a policy becomes effective. Perfect for students preparing for exams or professionals looking to refresh their understanding.
