Life Insurance and Annuities Final Exam Questions With
Accurate Answers.
Insurance companies have a direct correlation of risk to premium - accurate
answers-True
Higher the risk, higher the premium - accurate answers-True
Lower risk, lower premium - accurate answers-True
Age - accurate answers-Primary basis of risk classification
Risk Factors - accurate answers-Age, build, Physical Condition, personal
history, family history, Occupation, residence, Habits, Morals, sex, plan of
insurance, Economic status, aviation activities, avocation, military service
The Agent - accurate answers-agent or broker submits the application
(responsible for supplying a variety of info of the insured)
The Applicant - accurate answers-the proposed insured (provides the agent
with info on risk)
Factors affecting risk - accurate answers-physical characteristics,
identification, provides visual info and comments to underwriters, provides
hereditary characteristics and addiction info
Medical Examiner - accurate answers-compiles medical info about the
applicant
Attending physicians statement - accurate answers-source of info on applicant
who have undergone medical treatment in the past
Inspection Report - accurate answers-phone interviews
Medical information bureau MIB - accurate answers-clearinghouse for
confidential medical info on applicants life insurance
Judgement Method - accurate answers-works favorably when there is one
unfavorable factor to consider
, Numerical Rating System - accurate answers-assumes the average risk
accepted by a company is 100% and the risk can be a percentage of the whole
Non-medical Insurance - accurate answers-no paramedical required for
insurance approval (term coverage, few insurance companies offer it, smaller
amounts of coverage)
Weights to Risk Factors - accurate answers-build, physical condition, medical
history, family history, occupation, aviation & avocation, residents, habits,
morals, plan of insurance
Substandard Risks - accurate answers-a numerical system expected to
produce a higher mortality rate than on normal lives
Extra percentage tables - accurate answers-used to determine extra premiums
charged by insurance companies
Flat extra premiums - accurate answers-when hazards are constant (deafness,
aftermath of illness)
Removing substandard rating - accurate answers-smokers and overweight
people at the time of application, smoker free for 1 year or significant loss of
weight 20+ lbs, will remove the extra premium charge to the policy
Reinsurance - accurate answers-when an insurance company transfers all of a
portion of its risk under and insurance policy or group of policies to another
company or insurer
Primary company (direct writing) - accurate answers-the company that
issued the policy
Reinsurer (assuming company) - accurate answers-the company to which the
risk is transferred to
Why Reinsurance? - accurate answers-mergers, avoid too much risk on one
life, stabilize mortality experience
Accurate Answers.
Insurance companies have a direct correlation of risk to premium - accurate
answers-True
Higher the risk, higher the premium - accurate answers-True
Lower risk, lower premium - accurate answers-True
Age - accurate answers-Primary basis of risk classification
Risk Factors - accurate answers-Age, build, Physical Condition, personal
history, family history, Occupation, residence, Habits, Morals, sex, plan of
insurance, Economic status, aviation activities, avocation, military service
The Agent - accurate answers-agent or broker submits the application
(responsible for supplying a variety of info of the insured)
The Applicant - accurate answers-the proposed insured (provides the agent
with info on risk)
Factors affecting risk - accurate answers-physical characteristics,
identification, provides visual info and comments to underwriters, provides
hereditary characteristics and addiction info
Medical Examiner - accurate answers-compiles medical info about the
applicant
Attending physicians statement - accurate answers-source of info on applicant
who have undergone medical treatment in the past
Inspection Report - accurate answers-phone interviews
Medical information bureau MIB - accurate answers-clearinghouse for
confidential medical info on applicants life insurance
Judgement Method - accurate answers-works favorably when there is one
unfavorable factor to consider
, Numerical Rating System - accurate answers-assumes the average risk
accepted by a company is 100% and the risk can be a percentage of the whole
Non-medical Insurance - accurate answers-no paramedical required for
insurance approval (term coverage, few insurance companies offer it, smaller
amounts of coverage)
Weights to Risk Factors - accurate answers-build, physical condition, medical
history, family history, occupation, aviation & avocation, residents, habits,
morals, plan of insurance
Substandard Risks - accurate answers-a numerical system expected to
produce a higher mortality rate than on normal lives
Extra percentage tables - accurate answers-used to determine extra premiums
charged by insurance companies
Flat extra premiums - accurate answers-when hazards are constant (deafness,
aftermath of illness)
Removing substandard rating - accurate answers-smokers and overweight
people at the time of application, smoker free for 1 year or significant loss of
weight 20+ lbs, will remove the extra premium charge to the policy
Reinsurance - accurate answers-when an insurance company transfers all of a
portion of its risk under and insurance policy or group of policies to another
company or insurer
Primary company (direct writing) - accurate answers-the company that
issued the policy
Reinsurer (assuming company) - accurate answers-the company to which the
risk is transferred to
Why Reinsurance? - accurate answers-mergers, avoid too much risk on one
life, stabilize mortality experience
