CHAPTER 09: LIFE INSURANCE UNDERWRITING AND POLICY ISSUE QUESTIONS WITH CORRECT ANSWERS|100% verified|6 pages

CHAPTER 09: LIFE INSURANCE UNDERWRITING AND POLICY ISSUE QUESTIONS WITH CORRECT ANSWERS Underwriting CORRECT ANSWER Another term for risk selection; the process of reviewing the many characteristics that make up the risk profile of an applicant and, if they are insurable, at what rate. What are the two basic questions underwriters seek to answer? CORRECT ANSWER 1. Is the applicant insurable? 2. If the applicant and insured are two different people, does and insurable interest exist between them? When must an applicant show that an insurable interest exists? CORRECT ANSWER Only at the inception of the life insurance policy; does not have to exist at the time that the proceeds are paid. What are the two most notable factors in determining the number of sources checked when underwriting a policy? CORRECT ANSWER 1. The size of the requested policy 2. The risk profile developed after the initial review of the application (The larger the policy, the more comprehensive and diligent the underwriting research) What are the seven most common sources of underwriting information? CORRECT ANSWER 1. the application 2. the medical report 3. an attending physician's statement 4. the Medical Information Bureau 5. special questionnaires 6. inspection reports 7. credit reports