Underwriting and Policy Issue Flashcards
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Read the first 7 Underwriting and Policy Issue flashcards as text
Which of the following is NOT typically part of the field underwriting process performed by agents?
Answer: Conducting the medical examination
Medical examinations are conducted by paramedical examiners or physicians, not by agents as part of field underwriting.
When a life insurance policy is delivered to the insured, which condition must typically be met before it takes effect?
Answer: The insured must be in good health at delivery and the first premium must be paid
Policies not prepaid at application typically require the insured to be in good health at delivery and the first premium to be paid.
What is a 'flat extra' premium in life insurance underwriting?
Answer: An additional premium per $1,000 of coverage for a specified number of years
A flat extra is a fixed dollar amount added per $1,000 of coverage, often used for temporary hazards like a dangerous occupation.
An MIB (Medical Information Bureau) report is used by underwriters primarily to:
Answer: Detect misrepresentation and non-disclosure on insurance applications
The MIB stores coded medical information reported by member insurers to help detect material misrepresentation in applications.
Which of the following best describes a 'rated policy'?
Answer: A policy issued with a higher premium due to increased risk factors
A rated policy is issued to a substandard risk applicant at a higher premium to compensate for the greater mortality risk.
What is the primary purpose of an inspection report in the underwriting process?
Answer: To provide information about the applicant's character, finances, and lifestyle
An inspection report (consumer report) provides underwriters with background information on the applicant's habits, finances, and character.
In life insurance, what does the term 'insurability' refer to?
Answer: The applicant's eligibility to obtain coverage based on risk evaluation
Insurability is the determination that an applicant meets the insurer's standards for issuing a policy based on health, lifestyle, and other risk factors.