Podcast
Questions and Answers
All are true statements regarding the underwriting process, EXCEPT:
All are true statements regarding the underwriting process, EXCEPT:
- The original application is a primary source of information used in the underwriting process
- Signed consent from the applicant must be provided in order to test for AIDS and HIV virus
- The cost of examination is paid for by the insurer
- AIDS and HIV virus exams can be conducted in a discriminatory fashion (correct)
What actions should P take when 5 questions on a life application were not answered?
What actions should P take when 5 questions on a life application were not answered?
Set up a meeting with the applicant to answer the remaining questions.
Life insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation?
Life insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation?
USA Patriot Act
What is being delivered during a policy delivery?
What is being delivered during a policy delivery?
Which of these do NOT constitute policy delivery?
Which of these do NOT constitute policy delivery?
Who is not required to sign a life insurance application?
Who is not required to sign a life insurance application?
What will the insurer likely issue if a pilot declines an additional premium modification?
What will the insurer likely issue if a pilot declines an additional premium modification?
What legal right has the insurer waived if they accept a life insurance application with unanswered questions?
What legal right has the insurer waived if they accept a life insurance application with unanswered questions?
When an insurance application is taken by a producer, which of these statements is true?
When an insurance application is taken by a producer, which of these statements is true?
When does a life insurance contract become effective if the initial premium is not collected during the application process?
When does a life insurance contract become effective if the initial premium is not collected during the application process?
Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of:
Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of:
What item is given to T if they are told by the producer that the insurer is bound to the coverage as of the date of application?
What item is given to T if they are told by the producer that the insurer is bound to the coverage as of the date of application?
When will coverage be effective if the check was never signed by the applicant?
When will coverage be effective if the check was never signed by the applicant?
Which term accurately defines an underwriter's assessment of information on a life insurance application?
Which term accurately defines an underwriter's assessment of information on a life insurance application?
What actions should an agent take if a customer wants to apply for an insurance policy?
What actions should an agent take if a customer wants to apply for an insurance policy?
What is necessary before a life policy is issued?
What is necessary before a life policy is issued?
When did the coverage become effective in the case of an application submitted without an initial premium but approved manager?
When did the coverage become effective in the case of an application submitted without an initial premium but approved manager?
Why is a signature required on a life insurance application?
Why is a signature required on a life insurance application?
Why must an insurance applicant answer all questions on the application?
Why must an insurance applicant answer all questions on the application?
What is the entity whose sole purpose is sharing medical data among its member companies called?
What is the entity whose sole purpose is sharing medical data among its member companies called?
In what year was the USA Patriot Act enacted?
In what year was the USA Patriot Act enacted?
What may be considered a red flag when cash surrendering a Universal Life insurance policy in its early years?
What may be considered a red flag when cash surrendering a Universal Life insurance policy in its early years?
What might a medical information report (MIB) disclose?
What might a medical information report (MIB) disclose?
What action should the producer take after D explains recent chest pain events to the producer?
What action should the producer take after D explains recent chest pain events to the producer?
When cash surrendering a recent whole life policy and requesting proceeds payable to an unrelated third party, which violation will likely be red-flagged?
When cash surrendering a recent whole life policy and requesting proceeds payable to an unrelated third party, which violation will likely be red-flagged?
The underwriting process involves all of these, except for:
The underwriting process involves all of these, except for:
At what time must a policy owner have insurable interest on the insured for the life policy to be valid?
At what time must a policy owner have insurable interest on the insured for the life policy to be valid?
All of these are considered sources of underwriting information about an applicant EXCEPT:
All of these are considered sources of underwriting information about an applicant EXCEPT:
A(n) ________ contained in a life insurance policy states that the policy will not cover certain risks.
A(n) ________ contained in a life insurance policy states that the policy will not cover certain risks.
What is the purpose of the USA Patriot Act?
What is the purpose of the USA Patriot Act?
At what point does a $20,000 life insurance policy application go into effect if the producer does not collect the initial premium?
At what point does a $20,000 life insurance policy application go into effect if the producer does not collect the initial premium?
Which factors are taken into consideration when determining a premium rate for a whole life policy?
Which factors are taken into consideration when determining a premium rate for a whole life policy?
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT:
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT:
What action should a producer take if the initial premium is not submitted with the application?
What action should a producer take if the initial premium is not submitted with the application?
Which factors do not play a role in the underwriting of a life insurance policy?
Which factors do not play a role in the underwriting of a life insurance policy?
What must the insurer advise the applicant according to the Fair Credit Reporting Act?
What must the insurer advise the applicant according to the Fair Credit Reporting Act?
Which actions should a producer take when submitting an insurance application to an insurer?
Which actions should a producer take when submitting an insurance application to an insurer?
What kind of receipt was used when K is given a receipt stating that coverage begins immediately if the application is approved?
What kind of receipt was used when K is given a receipt stating that coverage begins immediately if the application is approved?
What should an agent ensure regarding changes made on an insurance application?
What should an agent ensure regarding changes made on an insurance application?
Which of these factors do not play a role in the underwriting of a life insurance policy?
Which of these factors do not play a role in the underwriting of a life insurance policy?
What is the initial source of underwriting for an insurance policy?
What is the initial source of underwriting for an insurance policy?
How will the insurer handle a policy returned within the free-look period?
How will the insurer handle a policy returned within the free-look period?
What must the producer obtain upon delivery of a rated life insurance policy?
What must the producer obtain upon delivery of a rated life insurance policy?
What must D do if a mistake is made during the application process?
What must D do if a mistake is made during the application process?
What can a student pilot pay regular premium cost for in her life insurance policy?
What can a student pilot pay regular premium cost for in her life insurance policy?
What is a statement made by an insured on an insurance application that must be true to the best of one's knowledge called?
What is a statement made by an insured on an insurance application that must be true to the best of one's knowledge called?
Which parts of a life insurance policy are guaranteed to be true?
Which parts of a life insurance policy are guaranteed to be true?
In order for coverage on a non-medical insurance application to take effect the same day, what must the producer collect?
In order for coverage on a non-medical insurance application to take effect the same day, what must the producer collect?
Study Notes
Underwriting Process
- Signed consent from the applicant is required for testing for AIDS and HIV.
- The cost of examinations is covered by the insurer.
- The original application serves as the primary source of information for underwriting.
- Discriminatory practices cannot be applied when conducting AIDS and HIV exams.
Actions of Producers
- Producers must meet with applicants if life application questions are unanswered.
- Any changes to applications require the applicant's initials for validation.
Life Insurance Regulations
- The USA Patriot Act mandates life insurance companies maintain an anti-money laundering compliance program.
- Insurers must report cash payments exceeding $10,000 under this act.
Policy Delivery
- Insurance contracts are delivered to the proposed insured.
- A policy issued with a rating does not count as delivery.
- Coverage becomes effective only when the initial premium is paid during policy delivery.
Application Requirements
- A beneficiary is not required to sign a life insurance application.
- An applicant must have insurable interest at the time of the application.
- All application questions must be answered, as they are vital for issuing the policy.
Conditional Receipts
- Conditions specified in a receipt must be satisfied for the policy to take effect.
- A conditional receipt indicates coverage begins immediately if the application is approved.
Health and Risk Assessment
- Underwriters utilize risk classification to evaluate applications.
- Factors such as personal health history can lead to adjustments, like extra premiums or exclusions.
Anti-Money Laundering Indicators
- Cash surrenders of Universal Life insurance policies may raise red flags.
- Transactions involving unrelated third parties can also trigger scrutiny under anti-money laundering rules.
Medical Information Bureau (MIB)
- MIB facilitates the sharing of medical data among member insurance companies.
- Information on prior substance use, such as marijuana, can be disclosed in MIB reports.
Fair Credit Reporting Act
- This law governs the use of consumer reports in determining insurance premium rates and underwriting decisions.
- Insurers must notify applicants when investigative consumer reports are conducted.
Application Processing and Coverage
- Applications submitted without initial premiums can still be forwarded to insurers.
- Life insurance coverage becomes effective upon policy delivery and initial premium collection.
Miscellaneous
- Backdating a policy allows applicants to secure a lower premium rate.
- A signed good health statement is required if the initial premium is not collected with the application.
- All crucial policy details are summarized in a policy summary for the insured's reference.
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Description
Test your knowledge on the underwriting process in life insurance, including regulations, producer actions, policy delivery, and application requirements. This quiz covers essential aspects such as consent for testing, cost coverage, and compliance mandates.
