If an agent feels to obtain the applicant signature on the insurance application what must the insurer do
Send the application back to the applicant for the signature
When must the policy summary for a life insurance policy be delivered to the policy owner?
The time of policy delivery
When most insurable interest exist in life insurance policies
At the time of application
Health contracts are prepared by insurers and must be accepted by the insured on an 'as is' basis. This describes what aspect of a health insurance contract?
contract of adhesion
What is the name of the process than insurance companies use to determine whether or not the applicant is insurable?
Underwriting
Insurance is a contract that protects the insured from what?
loss
When a charge needs to be made on the applicant for insurance which is the best method for correcting this information?
Complete a new application or ask the applicant to initial the correction on the original application
What risk classification would typically qualify for lower premiums?
preferred risk
What is the purpose of the agents report during the application process?
The agent's report discusses the agent's personal observations about the proposed insured that may help in the underwriting process
If an applicant does not receive his or her insurance policy, who would be held responsible?
agent
What is the main responsibility of a company underwriting unit?
Risk selection
What do you elements are necessary for life insurance contract to have a legal purpose?
Insurable interest and consent
What is a field underwriter?
Agent/producer
And health insurance contracts the insured is not legally bound to any particular action; however, the insurer is obligated to pay for loss is covered by the policy. What contract elements does this describe?
Unilateral
If an applicant for life insurance policy and the potential insured are two different people, what would be the underwriters may concern?
The existence of insurable interest between the application and the insured
What law protects consumers from the circulation in accurate or obsolete information?
The fair credit reporting act.
During which stage in the insurance process do insurers evaluate information that identifies adverse selection risk?
Underwriting
In forming an insurance contract, when does an acceptance usually occur?
When the insurer approves a prepaid application
Health insurance contracts are unilateral what does that mean?
only one party makes a legally enforceable promise
When does an insurance policy go into effect?
When the policy is delivered and the premium is paid
What do individuals use to transfer their risk of loss to a large group?
Insurance
How can help insurance policies be delivered to the insured?
Personally delivered by the agent or mailed
Who's responsibility is it to determine that all questions on an insurance application are answered?
The agents
When would a misrepresentation on insurance application be considered fraud?
If it is intentional and material
What is insurance underwriting?
The process of risk selection and classification
At what point does coverage begin when an agent issues a conditional receipt for a life insurance policy?
Either on the date of the application or the date of the medical exam (whichever occurs last)
What is adverse selection?
People who are more likely to submit insurance claims are seeking insurance more often than preferred risks.
When would a misinterpretation be considered material?
When it may alter the underwriting decision?
What entities make up the Medical Information Bureau?
Insurers
What is a warranty in an insurance contract?
An absolutely true statement upon which the validity of insurance contact is based
How is the information obtained for an investigative consumer report?
Through interviews with the applicants associates friends and neighbors
What document describes the pacific information about a policy?
Policy summary
If in a sure needs to obtain information about the app from investigators what is the insurance required to do?
Provide the applicant a disclosure authorization notice?
What report is used to assess risk associated with a health insurance applicant's lifestyle and character?
Investigative consumer report
What are three types of risk rating classifications in life insurance?
Standard substandard and preferred.
Are the four elements of insurance contract?
Agreement (offer and acceptance), consideration, competent parties, and legal purposes
What is a policy replacement?
A new policy is issued while an existing policy is terminated or reissued with a reduction in cash value
What term describes the fee a person pays an insurance company to receive coverage?
premium
What is the best way to handle incomplete insurance applications?
Return the application to the applicant for completion
What type of report provides information about the applicant's hobbies, habits and financial status?
inspection report
In insurance, when is the offer usually made on a contract?
When the insurance application is submitted
Who must have insurable interest in the insured?
Policyowner
What are the three main Instances when insurable interest exists in life insurance?
Insuring your own life, the life of a family member, or the life of a business partners or someone who has a financial obligation to the policyowner
Under Option B in a universal life policy, what happens to the death benefit?
Under Option B, the death benefit increases each year by the amount of the cash value increases
What type of licenses is/are required to sell variable annuities?
A life insurance and security license
How soon can income payments begin in an immediate annuity?
No later than 1 year from the time of annuity purchase
What type of life insurance policy offers pure death protection?
Term
What type of annuity requires an agent to have a security license?
Variable annuity
Why are policy loans not available on term insurance?
There is no cash value to borrow against
in annually renewable term policies, what is the annual premium based upon?
The insured's attained age
What type of insurance will perform the functions of cash accumulation?
Whole life insurance
What type of annuity credits it's interest based upon an index such as S&P 500?
Equity indexed annuity
Morality tables are used by insurance companies to predict what?
Life expectancy and the death rates for specific groups of individuals?
When does an adjustable life policy accumulate cash value?
When the premiums paid are more than the cost of the policy
What type of life insurance policy provides permanent protection?
whole life
What is the main reason for purchasing an annuity?
To provide income that the annuitant cannot outlive
What type of annuity can be purchased with a single premium?
Immediate annuity
Can a business or a corporation be an annuitant?
No, an annuitant must always be a natural person
When would a 20-pay whole life policy endow?
When the insured reaches 100
With a single premium deferred annuity when will the annuity payments become available?
No sooner than 1 year after the annuity purchase
What does the term "level" refer to in level term insurance?
Face amount
An annuity purchased with multiple payments that begins income payments after one year from the moment of purchase is known as what type of annuity?
Flexible premium deferred annuity
What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured's age 100?
Single premium whole life
If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?
Joint life annuity
A whole life policy that requires that the policy owner only pays premiums for a specific file number of years is known as what kind of policy A whole life policy that requires that the policy owner only pays premiums for a specific fied number of years i
Limited pay whole life
What type of whole life insurance policy generates immediate cash value?
Single premium whole life
whole life insurance policies mature when the insured reaches the age of 100. If the owner of a whole life policy (The insured) dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the benefic
The full death benefit
Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?
The annuitant receives payments from the annuity during the annuitization period; the beneficiary receives benefits after the annuitant's death
An individual has a contract that will provide him with a certain amount of income for the rest of his life. However this is not a life insurance policy. What type of contractor does this person have?
Annuity
Who's life expectancy is taking into consideration in an annuity contract
Annuitant