Underwriting Quiz

Front 1

Which rider would allow the insured to buy additional coverage at special times without a medical exam?

Back 1

Guaranteed insurability

Front 2

All the following statements are true regarding a disability income rider except:

Back 2

The monthly income is based on a % of the death benefit of the policy to which it is attached.

*This monthly income is based on a percentage of the faceamount of the policy to which it is attached.

Front 3

Which rating would be considered best of the following choices?

a. Fitch BBB+
b. AM Best B++
c. Moody Baa1
d. Standard and Poor A-

Back 3

Moody Baa1

*his is the best rating of the four and is considered a rank number 4 on the chart

Front 4

The incorrect statement concerning the cost of living rider would be:

Back 4

There is usually a premium increase for the additional protection if the insured can prove insurability.

*The insured does not have to prove insurability for the increase in death benefit.

Front 5

All the following are true concerning MIB except:

Back 5

MIB gets its information from claim forms and physicians.

*Medical Information Bureau gets its information only from underwriters.

Front 6

One of the underwriter's duties is classification of the risk. Which of the following would be incorrect concerning classification?

Back 6

A preferred risk is reflected in the mortality table.

*The mortality table reflects a standard or average risk.

Front 7

The purpose for this rider is to provide money for the insured to pay for medical and nursing care expenses if diagnosed with terminal illness.

Back 7

Accelerated Benefits

Front 8

Which of the following is true concerning AIDS testing and underwriting?

Back 8

policy may not contain exclusions for AID/HIV losses.

*Insurers cannot limit or deny coverage for due to aids. They can refuse to issue a policy if the insured tests positive for aids. MIB will record a positive aids test as an unspecified blood disorder and each insurer would be required to do their own testing.

Front 9

The State of California's required financial report includes all the following information except:

Back 9

The company's declined policy results.

Front 10

__________ guarantees that when a contract is annuitized, the income payments will be based on the greater of the actual contract value or a minimum payout base.

Back 10

Guaranteed Minimum Income Benefits

Front 11

Money returned to policyholders from an insurance company`s earnings is called:

Back 11

Policy dividends.

Front 12

Which of the following statements about the MIB is not true?

Back 12

Insurance companies may use MIB reports to decline a policy.

*The insurance company must have other factors to refuse the application.

Front 13

Which of the following is a significant difference between individual policies and Group Life Insurance contracts?

Back 13

Group underwriting is based on averages, such as the average age, the average working conditions and the average health condition of the group members

Front 14

All the following companies rate insurance companies financial strength except:

Back 14

Fitch's Investor Service

Front 15

An accelerated death benefit rider (also known as living needs rider) in a life insurance policy allows which of the following?

Back 15

The policyowner may receive a portion of the proceeds prior to the death under certain circumstances.

Front 16

How do the level term rider on a Family Maintenance Policy and the decreasing term rider on a Family Income policy differ from all other level and decreasing term riders in that:

Back 16

These riders are used to produce income instead of a death benefit.

Front 17

Sometimes a substandard risk is also called _____________

Back 17

Rated

Front 18

All of the following are true regarding surplus except:

Back 18

Shareholder surplus is 50% of the capital.

*Shareholder Surplus is 50% of the underwriting income profit for a stock insurance company that is taxed in theyear earned.

Front 19

All the following are disadvantages of the Traditional Net Cost Method except:

Back 19

The dividends and premium payments are projections.

Front 20

Morbidity tables are used by insurance companies to calculate:

Back 20

The likelihood of sickness.

Front 21

Usually companies offer several options when a policy is rated. Below are all true except:

Back 21

Charge for a lower age than the actual age

Front 22

Which of the following is a true statement?

Back 22

Critical Illness riders pay benefits upon first diagnosis of a covered condition, and doesn`t need to result in death.

Front 23

____________ is the amount by which an insurance company's assets exceed its liabilities and capital.

Back 23

Earned surplus

Front 24

What are the two methods most often used to compare the cost of life insurance policies?

Back 24

Interest Adjusted Cost Method and Traditional Net Cost.

Front 25

In the event of a loss, the insured is required to submit all of the following except:

Back 25

A completed Statement of the acting doctor.

Front 26

All of the following statements pertaining to life insurance premiums are correct except:

Back 26

In establishing premium rates, a company must assume it will earn a high rate of interest on its invested premiums

*The insurer assumes a low rate of interest in order to make sure they collect enough premium to meet their contractual obligations.

Front 27

Jason has been disabled for 5 years and his policy had a waiver of premium rider. Which of the following is true?

Back 27

The premiums that were paid would have no effect on the either the cash value or the death benefit.

Front 28

The following are guidelines that help avoid unfair underwriting for the risk of HIV/AIDS except:

Back 28

The insurer cannot deny coverage based solely on results from two different medical samples

*The insurer MAY decline a potential insured for coverage if his/her medical sample shows positive for AIDS/HIV on two different tests.

Front 29

Higher retention rates are advantages for all parties involved in life insurance because:

Back 29

Lower expenses and lower product prices.

Front 30

Jackson is paying $100 per month for his universal life policy which has a waiver of monthly deduction. Jackson was disabled 5 years. Which of the following is true?

Back 30

Jackson's mortality and expense charges would be paid however no money will be paid into the cash account.

*The waiver of monthly deduction on a universal life product only pays the mortality and expense deduction owed monthly. It does not pay any money into the cash account.