DC Health Insurance Underwriter Exam
Practice Questions And Correct Answers
(Verified Answers) Plus Rationale 2026
Q&A| Instant Download Pdf
1. A health insurance underwriter receives an application from a 45-year-
old applicant with controlled hypertension, no tobacco use, and a
stable employment history. What is the underwriter's PRIMARY
objective when evaluating this application?
A. Maximize commissions for the producer
B. Guarantee issuance regardless of risk
C. Assess the applicant's risk to determine appropriate underwriting action
D. Eliminate all applicants with medical conditions
Rationale: The primary purpose of underwriting is to evaluate the degree
of risk presented by an applicant and determine whether to issue, modify,
postpone, or decline coverage while maintaining the insurer's financial
stability.
2. Which underwriting factor generally has the GREATEST influence on an
individual health insurance application?
A. Favorite recreational activity
B. Educational background alone
,C. Current health status and medical history
D. Political affiliation
Rationale: Medical history and current health condition directly affect the
probability of future claims, making them central considerations in health
insurance underwriting.
3. During the underwriting process, which document provides detailed
information regarding an applicant's previous illnesses, surgeries, and
treatments?
A. Credit report
B. Motor vehicle record
C. Attending Physician Statement (APS)
D. Property appraisal
Rationale: An Attending Physician Statement supplies detailed medical
information from the applicant's physician and is commonly requested
when additional clarification is necessary.
4. Which of the following BEST describes adverse selection?
A. Insurers charging identical premiums for all applicants
B. Producers recommending excessive coverage
C. Individuals with higher-than-average risk being more likely to seek
insurance
D. Regulators establishing premium rates
Rationale: Adverse selection occurs when people expecting higher medical
expenses are more likely to purchase or retain insurance, increasing claim
costs for insurers.
5. A health insurance underwriter approves an application but excludes
coverage for a pre-existing knee condition where legally permitted.
This action is known as:
,A. Coinsurance
B. Reinsurance
C. A policy rider or exclusion endorsement
D. Coordination of benefits
Rationale: Underwriters may issue policies with specific exclusions or riders
to limit coverage for identified risks when allowed by applicable law and
policy provisions.
6. Which source of information is MOST useful for verifying prescription
drug usage during underwriting?
A. Property inspection report
B. Driving abstract
C. Prescription drug database or pharmacy report
D. Voter registration record
Rationale: Prescription histories often reveal medications and medical
conditions that assist underwriters in evaluating health risk.
7. An applicant intentionally omits a recent cancer diagnosis from the
insurance application. This is an example of:
A. Waiver
B. Estoppel
C. Material misrepresentation
D. Indemnification
Rationale: A material misrepresentation is a false statement or omission
that could influence an insurer's underwriting decision.
8. Which factor generally has the LEAST relevance in individual health
insurance underwriting?
A. Age
B. Medical history
, C. Tobacco use
D. Preferred vacation destination
Rationale: Vacation preferences do not meaningfully affect expected
health insurance claims, unlike medical and lifestyle factors.
9. Which underwriting decision would MOST likely result when an
applicant presents an unusually high but temporary health risk
expected to improve after treatment?
A. Immediate decline
B. Guaranteed acceptance
C. Postponement of the application
D. Lifetime exclusion of all illnesses
Rationale: Applications may be postponed until the applicant's temporary
condition stabilizes, allowing for a more accurate risk assessment.
10. Why is accurate health information essential during
underwriting?
A. To reduce marketing costs
B. To classify risk and establish appropriate coverage decisions
C. To determine investment strategies
D. To calculate sales commissions
Rationale: Accurate information enables insurers to evaluate risk
appropriately, maintain equitable premium structures, and avoid improper
underwriting decisions.
11. An applicant reports a history of diabetes that has remained
well-controlled for several years through medication and lifestyle
changes. What should the underwriter do FIRST?
Practice Questions And Correct Answers
(Verified Answers) Plus Rationale 2026
Q&A| Instant Download Pdf
1. A health insurance underwriter receives an application from a 45-year-
old applicant with controlled hypertension, no tobacco use, and a
stable employment history. What is the underwriter's PRIMARY
objective when evaluating this application?
A. Maximize commissions for the producer
B. Guarantee issuance regardless of risk
C. Assess the applicant's risk to determine appropriate underwriting action
D. Eliminate all applicants with medical conditions
Rationale: The primary purpose of underwriting is to evaluate the degree
of risk presented by an applicant and determine whether to issue, modify,
postpone, or decline coverage while maintaining the insurer's financial
stability.
2. Which underwriting factor generally has the GREATEST influence on an
individual health insurance application?
A. Favorite recreational activity
B. Educational background alone
,C. Current health status and medical history
D. Political affiliation
Rationale: Medical history and current health condition directly affect the
probability of future claims, making them central considerations in health
insurance underwriting.
3. During the underwriting process, which document provides detailed
information regarding an applicant's previous illnesses, surgeries, and
treatments?
A. Credit report
B. Motor vehicle record
C. Attending Physician Statement (APS)
D. Property appraisal
Rationale: An Attending Physician Statement supplies detailed medical
information from the applicant's physician and is commonly requested
when additional clarification is necessary.
4. Which of the following BEST describes adverse selection?
A. Insurers charging identical premiums for all applicants
B. Producers recommending excessive coverage
C. Individuals with higher-than-average risk being more likely to seek
insurance
D. Regulators establishing premium rates
Rationale: Adverse selection occurs when people expecting higher medical
expenses are more likely to purchase or retain insurance, increasing claim
costs for insurers.
5. A health insurance underwriter approves an application but excludes
coverage for a pre-existing knee condition where legally permitted.
This action is known as:
,A. Coinsurance
B. Reinsurance
C. A policy rider or exclusion endorsement
D. Coordination of benefits
Rationale: Underwriters may issue policies with specific exclusions or riders
to limit coverage for identified risks when allowed by applicable law and
policy provisions.
6. Which source of information is MOST useful for verifying prescription
drug usage during underwriting?
A. Property inspection report
B. Driving abstract
C. Prescription drug database or pharmacy report
D. Voter registration record
Rationale: Prescription histories often reveal medications and medical
conditions that assist underwriters in evaluating health risk.
7. An applicant intentionally omits a recent cancer diagnosis from the
insurance application. This is an example of:
A. Waiver
B. Estoppel
C. Material misrepresentation
D. Indemnification
Rationale: A material misrepresentation is a false statement or omission
that could influence an insurer's underwriting decision.
8. Which factor generally has the LEAST relevance in individual health
insurance underwriting?
A. Age
B. Medical history
, C. Tobacco use
D. Preferred vacation destination
Rationale: Vacation preferences do not meaningfully affect expected
health insurance claims, unlike medical and lifestyle factors.
9. Which underwriting decision would MOST likely result when an
applicant presents an unusually high but temporary health risk
expected to improve after treatment?
A. Immediate decline
B. Guaranteed acceptance
C. Postponement of the application
D. Lifetime exclusion of all illnesses
Rationale: Applications may be postponed until the applicant's temporary
condition stabilizes, allowing for a more accurate risk assessment.
10. Why is accurate health information essential during
underwriting?
A. To reduce marketing costs
B. To classify risk and establish appropriate coverage decisions
C. To determine investment strategies
D. To calculate sales commissions
Rationale: Accurate information enables insurers to evaluate risk
appropriately, maintain equitable premium structures, and avoid improper
underwriting decisions.
11. An applicant reports a history of diabetes that has remained
well-controlled for several years through medication and lifestyle
changes. What should the underwriter do FIRST?
