CWS; Underwriting- Unit 2 Questions
with complete solutions
Underwriting - correct answer ✔✔ Process of evaluating a risk to determine if it is acceptable
based on established guidelines.
-Agent/producer= field underwriter
-Helps company determine premiums and if they want to accept or decline a prospect
-Info used to evaluate a risk depends on type of coverage involved
Accuracy - correct answer ✔✔ Important to get the correct answers to questions on application
for both the applicant and the insurer
-Relys on correct answers to assess and rate the business
Changes in Application - correct answer ✔✔ Corrections can be made to applicant's info but the
applicant must certify that the error occurred and place their initials next to the correction
Completeness - correct answer ✔✔ Application must be complete for it to be considered
-Causes a delay and applicant will wait longer without insurance protection
Backdating - correct answer ✔✔ Some insurers allow and application to be backdated so the
premium can be based on an applicant's earlier age and lower the cost of the premium
-Backdating would allow a 41 y/o to purchase a life policy using the age of 40.
-Most state laws allow applications to be backdated up to 6 months
-If backdated, policy becomes effective as of the date requested on app.
-To receive less expensive premium, applicant must pay any additional premiums that would
have been paid from the backdate
, Required Signatures - correct answer ✔✔ -Required: Insured, Producer/Agent, Applicant/owner
(if applicant is not the insured)
-Proposed insured: signs if applicant is not the insured
-Company Officer signs a corporation owned policy
-Parent/guardian signs for juvenile policy
Producer's Report (Producer's statement) - correct answer ✔✔ Part III of app
-Producer records info that pertaining to the proposed insured including:
--producer's relationship to the proposed insured and any info on their financial status, habits,
and character
--Proposed Insured does NOT see the report and it is not attached to the policy when app is
issued
--Signed only by producer
Disclosure Notification - correct answer ✔✔ State law requires applicants to be given written
notice stating who is authorized to disclose personal info, kind of info to be disclosed, and
reason that it is being collected.
-By signing, applicant gives insurer consent to gather info as defined in notice
Collecting the Premium - correct answer ✔✔ "offer to buy" insurance exists when first premium
is submitted with application.
-If no premium is submitted with app coverage is DELAYED until premium is paid.
-If insured becomes insurable or dies before they pay premium, policy will pay no benefit
Conditional Receipt - correct answer ✔✔ When the initial premium is paid along with the
application for Life insurance, the agent or producer should give the applicant this
-date of app (or medical exam whichever is later) is when this becomes effective as long as
applicant passes underwriting regulations
with complete solutions
Underwriting - correct answer ✔✔ Process of evaluating a risk to determine if it is acceptable
based on established guidelines.
-Agent/producer= field underwriter
-Helps company determine premiums and if they want to accept or decline a prospect
-Info used to evaluate a risk depends on type of coverage involved
Accuracy - correct answer ✔✔ Important to get the correct answers to questions on application
for both the applicant and the insurer
-Relys on correct answers to assess and rate the business
Changes in Application - correct answer ✔✔ Corrections can be made to applicant's info but the
applicant must certify that the error occurred and place their initials next to the correction
Completeness - correct answer ✔✔ Application must be complete for it to be considered
-Causes a delay and applicant will wait longer without insurance protection
Backdating - correct answer ✔✔ Some insurers allow and application to be backdated so the
premium can be based on an applicant's earlier age and lower the cost of the premium
-Backdating would allow a 41 y/o to purchase a life policy using the age of 40.
-Most state laws allow applications to be backdated up to 6 months
-If backdated, policy becomes effective as of the date requested on app.
-To receive less expensive premium, applicant must pay any additional premiums that would
have been paid from the backdate
, Required Signatures - correct answer ✔✔ -Required: Insured, Producer/Agent, Applicant/owner
(if applicant is not the insured)
-Proposed insured: signs if applicant is not the insured
-Company Officer signs a corporation owned policy
-Parent/guardian signs for juvenile policy
Producer's Report (Producer's statement) - correct answer ✔✔ Part III of app
-Producer records info that pertaining to the proposed insured including:
--producer's relationship to the proposed insured and any info on their financial status, habits,
and character
--Proposed Insured does NOT see the report and it is not attached to the policy when app is
issued
--Signed only by producer
Disclosure Notification - correct answer ✔✔ State law requires applicants to be given written
notice stating who is authorized to disclose personal info, kind of info to be disclosed, and
reason that it is being collected.
-By signing, applicant gives insurer consent to gather info as defined in notice
Collecting the Premium - correct answer ✔✔ "offer to buy" insurance exists when first premium
is submitted with application.
-If no premium is submitted with app coverage is DELAYED until premium is paid.
-If insured becomes insurable or dies before they pay premium, policy will pay no benefit
Conditional Receipt - correct answer ✔✔ When the initial premium is paid along with the
application for Life insurance, the agent or producer should give the applicant this
-date of app (or medical exam whichever is later) is when this becomes effective as long as
applicant passes underwriting regulations
