FFL Life Course Life Insurance Underwriting and Policy Issue
This flashcard reviews the responsibilities of an insurance producer during the application process. It emphasizes proper disclosure, communication with the insurer, and procedures related to underwriting documentation and premium handling.
Which of these actions should a producer take when submitting an insurance application to an insurer?
<> Disclose to the applicant the amount of commissions to be earned on this transaction
<> Inform insurer of relevant information not included in the application
<> Issue a binding receipt to the applicant if no initial premium is submitted
<> Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer
Inform insurer of relevant information not included on the application
~ One of the actions a producer should take when submitting an application is to advise the insurer of any other relevant information not contained in the application
Key Terms
Which of these actions should a producer take when submitting an insurance application to an insurer?
<> Disclose to the applicant the amount of commissions to be earned on this transaction
<> Inform insurer of relevant information not included in the application
<> Issue a binding receipt to the applicant if no initial premium is submitted
<> Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer
Inform insurer of relevant information not included on the application
~ One of the actions a producer should take when submitting an applicatio...
Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?
<> Warranty review
<> Inspection report
<> Risk classification
<> Insurable interest
Risk classification
~ Underwriting, another term for risk selection, is the process of reviewing the many characteristics that make up the risk ...
Any changes made on an insurance application requires the initials of whom?
<> Applicant
<> Insured
<> Agent
<> Beneficiary
Applicant
~ When an applicant makes a mistake in the information given to an agent in completing the application, the applicant can have the age...
T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T?
<> Conditional receipt
<> Warranty receipt
<> Backdated receipt
<> Binding receipt
conditional receipt
~ A conditional receipt binds the insurer to coverage as of the date of the application or medical exam, provided the propos...
What is being delivered during a policy delivery?
<> Policy summary sheet and disclosure material to the proposed insured
<> Application and initial premium to the insurer
<> Insurance contract to the proposed insured
<> A ending receipt to the proposed insured
Insurance contract to the proposed insured
~ Policy deliver refers to the delivery of t...
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?
<> Life Insurance Buyer's Guide
<> Medical Information Bureau
<> Part III of the application
<> Fair Credit Reporting Act
Fair Credit Reporting Act
~ The Fair Credit Reporting Act requires that an insurance application state that an investigative consumer report may...
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| Term | Definition |
|---|---|
Which of these actions should a producer take when submitting an insurance application to an insurer? | Inform insurer of relevant information not included on the application |
Which of these terms accurately defines an underwriter's assessment of information on a life insurance application? <> Warranty review <> Inspection report <> Risk classification <> Insurable interest | Risk classification |
Any changes made on an insurance application requires the initials of whom? <> Applicant <> Insured <> Agent <> Beneficiary | Applicant |
T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T? <> Conditional receipt <> Warranty receipt <> Backdated receipt <> Binding receipt | conditional receipt |
What is being delivered during a policy delivery? | Insurance contract to the proposed insured ~ Policy deliver refers to the delivery of the insurance contract to the applicant |
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? <> Life Insurance Buyer's Guide <> Medical Information Bureau <> Part III of the application <> Fair Credit Reporting Act | Fair Credit Reporting Act |
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT: <> Signed HIPPA disclosure <> Signed amendment <> Signed statement of Good Health <> The required premium | Signed HIPPA discloser |
On delivery of a policy, a signed statement of good health is typically requested if: | The application was submitted without the initial premium |
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take? | Collect initial premium along with a signed health statement |
A life insurance application must be signed by all of these, EXCEPT: <> The policy owner <> The agent <> The insured (if an adult) <> beneficiary | Beneficiary ~ Beneficiaries are not required to sign an insurance application |
A student pilot can pay regular premiums costs for her life insurance policy with the addition of which of the following? <> Guaranteed Insurability rider <> Accidental Death Benefit rider <> Aviation exclusion <> Impairment rider | Aviation exclusion |
Which of these factor do NOT play a role in the underwriting of a life insurance policy? <> Occupation <> Avocations <> Credit status <> Marital status | Marital status ~ Marital status does not affect the underwriting of a life insurance policy |
What is the purpose of a Policy Summary? | It highlights the critical parts of the policy issued |
Before a life insurance policy is issued, which of these components of the contract is required? <> Beneficiary's signature <> A conditional receipt <> Applicant's signature on application <> Attending Physician Statement (APS) | Applicant’s signature on application ~ A signature on an application is required before a life policy will be issued |
The underling process involves all of these, EXCEPT for: <> Application <> Risk classification <> Policy loan <> Credit report | Policy loan ~ A policy loan is not a factor in the underwriting process |
When a policy owner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(AN): <> Unfair trade practice violation <> Anti-money laundering violation <> Title 18 fraud violation <> Federal fair credit act violation | Anti-money laundering violation |
Which of the following statement is CORRECT about an agent who is taking an insurance application? | The agent should have the applicant initial any changes made on the application |
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? | Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company |
When an insurance application is taken by a producer, which of these statement is true? | Any changes made on the application require the applicant’s initials |
What action should a producer take if the initial premium is NOT submitted with the application? | Forward the application to the insurer without the initial premium |
P is a producer who notices 5 questions on a life application were not answered. What actions should P take? | Set up a meeting with the applicant to answer the remaining questions |
An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? <> Weight <> Medical history <> Gender <> Hobbies | Gender ~ An insurance company may NOT reject a prospective insured’s life application on the basis of gender |
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. if the application is approved, when will coverage be effective? | The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured |
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? | Complete the application and review the information with the customer prior to obtaining the customer’s signature, then send the application off to the insurance company |
Which federal law allows an insurer to obtain an inspection report on a potential insured? <> Medical Information Bureau Act <> Fair Credit Reporting Act <> Freedom of Information Act <> Medical Information Act | Fair Credit Reporting Act |
Which federal law allows an insurer to obtain an inspection report on a potential insured? <> Medical Information Bureau Act <> Fair Credit Reporting Act <> Freedom of Information Act <> Medical Information Act | Fair Credit Reporting Act |
Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine: | probability of making timely premium payments |
Information obtained from a phone conversation to the proposed insured can be found in which of these reports? <> Attending physician's report <> Agent's report <> Inspection report <> MIB report | Agent's report | ~ An inspection report may include information obtained by a telephone call to proposed insured |
An incomplete life insurance application submitted to an insurer will result in which of these actions? | Application will be returned to the writing agent | ~ If the company discovers a mistake or incompletion, it usually returns the application to the producer |
Which parts of a life insurance policy are guaranteed to be true? <> Representation <> Statement <> Warranty <> Rating | Warranty |
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: <> Insurance company issues policy <> Initial premium is collected <> Policy is delivered <> Free-look period | Free-look period has expired |
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? | Policy was returned within the free-look period, premium will bee fully refunded |
Which factors are taken into consideration when an insurance company determines the premium rate fro a Whole Life policy on an applicant? <> Risk classification <> Source of income <> Geographical location <> Marital status | Risk classification |
At what time must a policy owner have insurable interest on the insured in order for the life policy to be valid? <> When the insured dies <> At the time of application <> After the Contestable period <> When the policy proceeds are paid | At the time of application | ~ With life insurance, insurable interest must exist only at the policy inception |