Life & Health 1

What is the purpose of a conditional receipt?

A producer agent must do all of the following except? -Disclose commissions earned from the sale of the policy. -Explain the policy provisions, riders, & exclusions. -Collect any premium due. -Explain the rating procedures if the policy is rated differently than applied for.

An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is eventually able to give enough information for the application to be competed. After the policy was issued, the agent talked to the insured's family, & they explained that the insured was recovering from a surgery & might have been under the influence of medication at the time of application. What could happen?

If a change needs to be made to the application for insurance, the agent may do all of the following except? -Erase the incorrect answer & record the correct answer. -Draw a line through the first answer, record the correct answer, & have the applicant initial the change. -Note on the application the reason for the change. -Destroy the application & complete a new one.

Which of the following would be considered a non-medical insurance application? -An application submitted with the Agent's Report. -Any application for life insurance. -An application on which the medical information is completed by the applicant & the agent only. -An application that does not ask any questions about the applicant's medical history.

The full premium was submitted with the application for life insurance, & the policy was issued 2 weeks later as requested. When does the policy coverage become effective?

Upon policy delivery, the producer may be required to obtain any of the following except? -Payment of premium. -Delivery receipt. -Signed waiver of premium. -Statement of good health.

If an applicant for a life insurance policy & person to be insured by the policy are 2 different people, the underwriter would be concerned about:

Which of the following is a risk classification used by underwriters for life insurance? -Poor -Normal -Excellent -Standard

The term "illustration" in a life insurance policy refers to:

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

What is the term for the fee a policy owner must pay to the insurance company to maintain coverage?

An insurer received a report regarding a potential insured that includes the insured's financial status, hobbies, & habits. What type of report is that?

All of the following information about the applicant is identified in the General Information section of a life insurance application except? -Gender. -Occupation. -Education. -Age.

What is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?

All of the following are duties & responsibilities of producers at the time of application except? -Change any incorrect statement on the application by personally initialing next to the corrected statement. -Explain the nature & type of any receipt the producer is giving to the applicant. -Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. -Check to make sure there are no unanswered questions on the application.

What describes the specific information about a policy?

What do individuals use to transfer their risk of loss to a larger group?

In the underwriting process, it was determined that the applicant for life insurance is in poor health & has some dangerous habits. Which of the following is true concerning the policy premium? -The applicant's habits & health do not affect the premiums. -It will likely be lower because the applicant is a preferred risk. -It will likely be higher because the applicant is a substandard risk. -It will likely be the average premium issued to standard risks.

When Y applied for insurance & paid the initial premium on Aug 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than standard. Y was killed in an automobile accident on Aug 22, before the policy was issued. In this case, the insurance company will

What is the primary source of information used for insurance underwriting?

If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to

Why should the producer personally delivery the policy when the first premium has already been paid?

An agent & the applicant for a life insurance policy fill out & sign the application. However, the applicant does not wish to give the agent the initial premium, & no conditional receipt is issued. When will coverage begin?

What report includes information regarding a person's credit, character, reputation, & habits?

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be true? -The policy will be void. -The insurer may deny coverage later, because of the information missing on the application. -The application will be interpreted as if the insurer waived its right to have an answer on the application. -The policy will be interpreted as if the insured did not have an answer to the question.

Which of the following information about the applicant is not included on Part 1 of the application for insurance? -Occupation -Marital status -Medical background -Gender

What is the purpose of the buyer's guide?

Contracts that are prepared by one party & submitted to another party on a "take it or leave it" basis are classified as

Who makes up the Medical Information Bureau?

When is the earliest a policy may go into effect?

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. What insurance principle has the insured violated?

Insurance is the transfer of

What is a definition of a unilateral contract?

Which of the following policies would have an IRS required corridor or gap between the cash value & the death benefit? -Universal Life - Option A -Universal Life - Option B -Equity Indexed Universal Life -Variable Universal Life

What would help prevent a universal life policy from lapsing?

During partial withdrawal from a universal life policy, which portion will be taxed?

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin 2 years after the annuity was purchased. What type of annuity is it?

Which Universal Life option has a gradually increasing cash value & a level death benefit?

The insured is also the policy owner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?

An individual has just borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited for this situation?