EXAMFX Underwriting and Policy Issue 3

Question 1

Which of the following is NOT typically part of the field underwriting process performed by agents?

Accepted Answer

Conducting the medical examination

Answer

Medical examinations are conducted by paramedical examiners or physicians, not by agents as part of field underwriting.

Question 2

When a life insurance policy is delivered to the insured, which condition must typically be met before it takes effect?

Accepted Answer

The insured must be in good health at delivery and the first premium must be paid

Answer

Policies not prepaid at application typically require the insured to be in good health at delivery and the first premium to be paid.

Question 3

What is a 'flat extra' premium in life insurance underwriting?

Accepted Answer

An additional premium per $1,000 of coverage for a specified number of years

Answer

A flat extra is a fixed dollar amount added per $1,000 of coverage, often used for temporary hazards like a dangerous occupation.

Question 4

An MIB (Medical Information Bureau) report is used by underwriters primarily to:

Accepted Answer

Detect misrepresentation and non-disclosure on insurance applications

Answer

The MIB stores coded medical information reported by member insurers to help detect material misrepresentation in applications.

Question 5

Which of the following best describes a 'rated policy'?

Accepted Answer

A policy issued with a higher premium due to increased risk factors

Answer

A rated policy is issued to a substandard risk applicant at a higher premium to compensate for the greater mortality risk.

(EXAMFX) Exam FX Insurance Practice Test