exam fx texas life and health insurance
flashcards Questions & Answers with
complete solutions
What law protects consumers from the circulation of inaccurate or obsolete information?
- ANSWER-The Fair Credit Reporting Act
What do individuals use to transfer their risk of loss to a larger group? - ANSWER-
Insurance
What term describes the fee a person pays an insurance company to start coverage? -
ANSWER-Premium
When a change needs to be made on the application for insurance, which is the best
method for correcting the information? - ANSWER-complete a new application or ask
the applicant to initial the corrections on the original application
how is the information obtained for an investigative consumer report? - ANSWER-
through interviews with the applicants associates, friends, and neighbors.
What risk classification would typically qualify for lower premiums? - ANSWER-
Preferred Risk
what are the three risk classifications in life insurance? - ANSWER-Standard,
Substandard, Preferred
what is the main responsibility of a company's underwriting unit? - ANSWER-Risk
Selection
When would a misrepresentation be considered material? - ANSWER-when it may alter
the underwriting decision
What entities make up the Medical Information Bureau? - ANSWER-Insurers
if an applicant for an insurance policy and the potential insured are two different people,
what would be the underwriters main concern? - ANSWER-the existence of insurable
interest between the applicant and the insured
What is adverse selection? - ANSWER-People who are more likely to submit insurance
claims are seeking insurance more often than preferred risks
,What type of report provides information about the applicant's hobbies, habits and
financial status? - ANSWER-Inspection report
At what point does coverage begin when an agent issues a conditional receipt for a life
insurance policy? - ANSWER-either on the date of the application or the date of the
medical exam (whichever occurs last)
what is the best way to handle incomplete insurance applications? - ANSWER-return
the application to the applicant for completion
when does an insurance policy go into effect? - ANSWER-When the policy is delivered
and the premium is paid
what are the three main instances when insurable interest exists in life insurance? -
ANSWER-Insuring your own life, the life of a family member, or the life of a business
partner or someone who has a financial obligation to the policyholder.
Insurance is a contract that protects the insured from what? - ANSWER-loss
what report is used to assess risk associated with a health insurance applicants lifestyle
and character? - ANSWER-Investigative consumer report
If an agent fails to obtain the applicant's signature on the insurance application, what
must the insurer do? - ANSWER-send the application back to the applicant for signature
what is policy replacement? - ANSWER-a new policy is issue while an existing policy is
terminated or reissued with a reduction in cash value
When would a misrepresentation on an insurance application be considered fraud? -
ANSWER-when it is intentional and material
who must have insurable interest in the insured? - ANSWER-the policy holder
during what stage in the insurance process do insurers evaluate information that
identifies adverse selection risks? - ANSWER-underwriting
Who is a field underwriter? - ANSWER-Agent/Producer
how can health insurance policies be delivered to the insured? - ANSWER-Personally
delivered by the agent or mailed
in forming an insurance contract, when does an acceptance usually occur? - ANSWER-
when the insurer approves a prepaid application
what two elements are necessaryfor a life insurance contract to have a legal purpose? -
ANSWER-insurable interest and consent
, in insurance, when is the offer usually made on a contract? - ANSWER-when the
insurance application is submitted.
when must the policy summary for a life insurance policy be delivered to the
policyowner? - ANSWER-at the time of policy delivery
if an insurer needs to obtain information about the applicant from investigators, what is
the insurer required to do? - ANSWER-provide the applicant a disclosure authorization
notice
health insurance contracts are unilateral. what does that mean? - ANSWER-Only one
party makes a legally enforceable promise
what is a warranty in an insurance contract? - ANSWER-an absolutely true statement
upon which the validity of the insurance contract is based
what document describes the specific information about a policy? - ANSWER-policy
summary
whose responsibility is it to determine that all the questions on an insurance application
are answered? - ANSWER-the agents
what is insurance underwriting? - ANSWER-the process of risk selection and
classification
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? - ANSWER-
contract of adhesion
if an applicant does not receive his or her insurance policy, who would be held
responsible? - ANSWER-the agent
what law protects consumers from the circulation of in accurate or obsolete information?
- ANSWER-the fair credit reporting act
when must insurable interest exist in a life insurance policy? - ANSWER-at the time of
the application
what are the four elements of an insurance contract? - ANSWER-agreement (offer and
acceptance), consideration, competent parties, and legal purpose
what is the purpose of the agents report during the application process - ANSWER-the
agents report discusses the agents personal observations about the proposed insured
that may help in the underwriting process
flashcards Questions & Answers with
complete solutions
What law protects consumers from the circulation of inaccurate or obsolete information?
- ANSWER-The Fair Credit Reporting Act
What do individuals use to transfer their risk of loss to a larger group? - ANSWER-
Insurance
What term describes the fee a person pays an insurance company to start coverage? -
ANSWER-Premium
When a change needs to be made on the application for insurance, which is the best
method for correcting the information? - ANSWER-complete a new application or ask
the applicant to initial the corrections on the original application
how is the information obtained for an investigative consumer report? - ANSWER-
through interviews with the applicants associates, friends, and neighbors.
What risk classification would typically qualify for lower premiums? - ANSWER-
Preferred Risk
what are the three risk classifications in life insurance? - ANSWER-Standard,
Substandard, Preferred
what is the main responsibility of a company's underwriting unit? - ANSWER-Risk
Selection
When would a misrepresentation be considered material? - ANSWER-when it may alter
the underwriting decision
What entities make up the Medical Information Bureau? - ANSWER-Insurers
if an applicant for an insurance policy and the potential insured are two different people,
what would be the underwriters main concern? - ANSWER-the existence of insurable
interest between the applicant and the insured
What is adverse selection? - ANSWER-People who are more likely to submit insurance
claims are seeking insurance more often than preferred risks
,What type of report provides information about the applicant's hobbies, habits and
financial status? - ANSWER-Inspection report
At what point does coverage begin when an agent issues a conditional receipt for a life
insurance policy? - ANSWER-either on the date of the application or the date of the
medical exam (whichever occurs last)
what is the best way to handle incomplete insurance applications? - ANSWER-return
the application to the applicant for completion
when does an insurance policy go into effect? - ANSWER-When the policy is delivered
and the premium is paid
what are the three main instances when insurable interest exists in life insurance? -
ANSWER-Insuring your own life, the life of a family member, or the life of a business
partner or someone who has a financial obligation to the policyholder.
Insurance is a contract that protects the insured from what? - ANSWER-loss
what report is used to assess risk associated with a health insurance applicants lifestyle
and character? - ANSWER-Investigative consumer report
If an agent fails to obtain the applicant's signature on the insurance application, what
must the insurer do? - ANSWER-send the application back to the applicant for signature
what is policy replacement? - ANSWER-a new policy is issue while an existing policy is
terminated or reissued with a reduction in cash value
When would a misrepresentation on an insurance application be considered fraud? -
ANSWER-when it is intentional and material
who must have insurable interest in the insured? - ANSWER-the policy holder
during what stage in the insurance process do insurers evaluate information that
identifies adverse selection risks? - ANSWER-underwriting
Who is a field underwriter? - ANSWER-Agent/Producer
how can health insurance policies be delivered to the insured? - ANSWER-Personally
delivered by the agent or mailed
in forming an insurance contract, when does an acceptance usually occur? - ANSWER-
when the insurer approves a prepaid application
what two elements are necessaryfor a life insurance contract to have a legal purpose? -
ANSWER-insurable interest and consent
, in insurance, when is the offer usually made on a contract? - ANSWER-when the
insurance application is submitted.
when must the policy summary for a life insurance policy be delivered to the
policyowner? - ANSWER-at the time of policy delivery
if an insurer needs to obtain information about the applicant from investigators, what is
the insurer required to do? - ANSWER-provide the applicant a disclosure authorization
notice
health insurance contracts are unilateral. what does that mean? - ANSWER-Only one
party makes a legally enforceable promise
what is a warranty in an insurance contract? - ANSWER-an absolutely true statement
upon which the validity of the insurance contract is based
what document describes the specific information about a policy? - ANSWER-policy
summary
whose responsibility is it to determine that all the questions on an insurance application
are answered? - ANSWER-the agents
what is insurance underwriting? - ANSWER-the process of risk selection and
classification
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? - ANSWER-
contract of adhesion
if an applicant does not receive his or her insurance policy, who would be held
responsible? - ANSWER-the agent
what law protects consumers from the circulation of in accurate or obsolete information?
- ANSWER-the fair credit reporting act
when must insurable interest exist in a life insurance policy? - ANSWER-at the time of
the application
what are the four elements of an insurance contract? - ANSWER-agreement (offer and
acceptance), consideration, competent parties, and legal purpose
what is the purpose of the agents report during the application process - ANSWER-the
agents report discusses the agents personal observations about the proposed insured
that may help in the underwriting process
