Lesson 5 Review Quiz

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Purpose of Underwriting

Which of the following questions would NOT be a legitimate concern for an underwriter?

Agents are sometimes referred to as field underwriters.

Underwriting Process

In Florida, a child must be at least _______ years of age to sign a life insurance policy.

Among the following, who would most likely pay a lower premium amount?

The Application

There are three basic sections in a typical life insurance application. Match the following sections with their respective descriptions.

Which of the following is NOT required on an insurance application?

Only a physician can complete and sign the Attending Physician's Statement.

Every applicant must receive and sign a written notice letting them know that the MIB may be consulted for more information during the underwriting process.

Fair Credit Reporting Act of 1970

Most every type of financial transaction relies on credit reports. Under the Fair Credit Reporting Act, if the insurer is given any adverse information about the applicant that results in coverage being denied, or approved with higher premium rates, the applicant must be notified within and given the name of the reporting agency used. If the applicant requests a summary of the nature and scope of the investigation, the insurer must provide that information within .

Word bank: 3 days, 5 days

Most every type of financial transaction relies on credit reports. Under the Fair Credit Reporting Act, if the insurer is given any adverse information about the applicant that results in coverage being denied, or approved with higher premium rates, the applicant must be notified within 3 days and given the name of the reporting agency used. If the applicant requests a summary of the nature and scope of the investigation, the insurer must provide that information within 5 days.

Lesson 5.4

Field Underwriting Procedures

The system of coverage that is designed to allow the insured immediate coverage and yet allows the insured to defer premium payments is known as:

Match the following types of receipts with their respective descriptions.

a)	Given to the applicant when they pay a premium at time of application, which binds the insurance company if the risk is approved as applied for, subject to any other conditions stated on the receipt. If the applicant were to die before a policy is issued, the company will pay the death benefit but only if the policy would have been issued.
b)	Given by a company upon an applicant's first premium payment. The policy, if approved, becomes effective from the date of the receipt. If the applicant were to die before the policy is issued, the company will pay the death benefit whether or not the policy would have been issued (of course, subject to any limitations specified).
a) Conditional Receipt b) Binding Receipt (Lessons 5.5.4, 5.5.5)

Generally, if a receipt is issued when the initial premium deposit is collected, the would be considered the effective date of the policy. If the initial premium deposit is NOT collected and submitted with the application, the would be considered the effective date of the policy as long as the required premium payment is made within the appropriate timeframe.

Word bank: date of the receipt, date the policy is issued

Generally, if a receipt is issued when the initial premium deposit is collected, the date of the receipt would be considered the effective date of the policy. If the initial premium deposit is NOT collected and submitted with the application, the date the policy is issued would be considered the effective date of the policy as long as the required premium payment is made within the appropriate timeframe.

Lesson 5.5.6

Policy Issue and Delivery

Constructive Delivery is determined only when the policy is in the physical hands of the insured.

Constructive Delivery is the point at which the insurer releases control of the contract to another party, such as the agent, for unconditional delivery to the insured.

LESSON 5: LIFE INSURANCE UNDERWRITING AND POLICY ISSUE