An insurance company needs to obtain personal needs to obtain personal information from a third party concerning an applicant. Which law do all insurers and their producers need to comply with?
Fair Credit Reporting Act. To protect the rights of consumers for whom an inspection or credit report has been requested, Congress enacted the Fair Credit Reporting Act in 1970.
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?
A Good Health Statement. The producer must have the applicant sign a statement of good health when delivering the policy.
An insurance applicant with a below-average likelihood of loss is typically considered to be a:
Preferred Risk
In which of the following relationships would there NOT be an insurable interest?
Business owner to business customer.
Exceptions included:
-Parent to child
-Business partner to business partner
-brother to sister
Which of the following pertains to the analysis of an applicant's personal information and determining whether insurance should be issued or declined?
Underwriting
Preferred risk policies with reduced premiums are issued by insurance companies because the insured has...
Better than average mortality or morbidity experience.
What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day?
Claim will be paid if application is approved.
All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT:
National Association of insurance underwriters.
Exceptions include:
-Agent's report
-Medical information Bureau (MIB)
-Inspection reports
A field underwriter's main task is:
To ensure an applicant's medical information is accurate and complete.
Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies?
Substandard Risk
Exceptions include:
-preferred risk
-unacceptable risk
-standard risk
When does a life insurance policy typically become effective?
When initial premium is collected and policy is issued.
What guarantees that the statements supplied by an insurance applicant are true?
Warranty. A warranty is considered a statement of fact or something guaranteed to be true. Breach of warranties can be considered grounds for voiding the policy.
Underwriters can acquire information from all of the following sources EXCEPT:
Genetic testing
Exceptions include:
-Medical Information Bureau (MIB)
-consumer reports
-attending physician's statements.
Field underwriting performed by the producer involves
Completing the application and collecting initial premium. Other duties include, but are not limited to, providing disclosure information to the applicant and policy delivery.
Other duties that are semi included are:
-assigning a risk classification to th
Which scenario would most life insurance policies exclude coverage for?
An individual who has a hobby racing cars once a month.
Exceptions include:
-A tourist traveling abroad a major airline carrier
-an airline pilot who flies for a commercial carrier
a solider on leave at home