When an agent delivered an insurance policy to the insured he collected the initial premium

Collection of Premiums. Given the scope of Distributor’s activities hereunder, it is not anticipated that Distributor would collect or receive premiums for the Contracts. However, to the extent that Distributor or a Distributor Representative receives a premium, such premium shall be remitted promptly, and in any event not later than two business days, in full, together with any applications, forms and any other required documentation, to the Contract Service Center. Checks or money orders in payment of premiums shall be drawn to the order of “Protective Life Insurance Company.” If any premium is held at any time by Distributor, Distributor shall hold such premium in a fiduciary capacity until remitted. Distributor acknowledges that all such premiums, whether by check, money order or wire, shall be the property of Insurer. Distributor acknowledges that Insurer shall have the unconditional right to reject, in whole or in part, any application or premium.

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What must be given to a life insurance applicant when the agent receives an application and the initial premium?
When an applicant applies for insurance the process?
What must be provided to the applicant by the agent when replacement occurs?
Why should a producer collect a premium at the time the application is completed?
When the first premium is collected at the time of application for a policy the effective date of coverage is?
When the initial premium is not paid with the application what must the producer do before coverage can begin?
Why should the agent personally deliver the policy when the first premium has already been paid?
What does it mean for an insurance policy to be delivered?

Índice

What must be given to a life insurance applicant when the agent receives an application and the initial premium?
When an applicant applies for insurance the process?
What must be provided to the applicant by the agent when replacement occurs?
Why should a producer collect a premium at the time the application is completed?

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Purpose of Underwriting

Which of the following questions would NOT be a legitimate concern for an underwriter?

	a)	Is the proposed insured a standard risk?
	b)	Is the proposed insured insurable?
	c)	Does insurable interest exist?
	d)	How much money does the proposed insured have in the bank?
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Agents are sometimes referred to as field underwriters.

	a)	True
	b)	False
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Underwriting Process

In Florida, a child must be at least _______ years of age to sign a life insurance policy.

	a)	18
	b)	15
	c)	12
	d)	10
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Among the following, who would most likely pay a lower premium amount?

	a)	A standard risk client
	b)	A preferred risk client
	c)	A substandard risk client
	d)	A younger client
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The Application

There are three basic sections in a typical life insurance application. Match the following sections with their respective descriptions.

a)	The front or initial part of the application which contains personal information about both the applicant and the proposed insured.
b)	Contains questions about the proposed insured's health, at the present time and in the past.
c)	Contains the agent's observations of the involved parties.
a) PART I - General b) PART II - Medical c) PART III - Agent's Report (Lesson 5.3)

Which of the following is NOT required on an insurance application?

	a)	The agent's I.D. number
	b)	The name of the insurance company
	c)	The agent's mother's maiden name
	d)	The name of the soliciting agent
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Only a physician can complete and sign the Attending Physician's Statement.

	a)	True
	b)	False
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Every applicant must receive and sign a written notice letting them know that the MIB may be consulted for more information during the underwriting process.

	a)	True
	b)	False
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Fair Credit Reporting Act of 1970

Most every type of financial transaction relies on credit reports. Under the Fair Credit Reporting Act, if the insurer is given any adverse information about the applicant that results in coverage being denied, or approved with higher premium rates, the applicant must be notified within and given the name of the reporting agency used. If the applicant requests a summary of the nature and scope of the investigation, the insurer must provide that information within .

Word bank: 3 days, 5 days

Most every type of financial transaction relies on credit reports. Under the Fair Credit Reporting Act, if the insurer is given any adverse information about the applicant that results in coverage being denied, or approved with higher premium rates, the applicant must be notified within 3 days and given the name of the reporting agency used. If the applicant requests a summary of the nature and scope of the investigation, the insurer must provide that information within 5 days.

Lesson 5.4

Field Underwriting Procedures

The system of coverage that is designed to allow the insured immediate coverage and yet allows the insured to defer premium payments is known as:

	a)	Preliminary Term for Interim Coverage.
	b)	the Conditional Receipt.
	c)	the Binding Receipt.
	d)	the Insurability Conditional Receipt.
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Match the following types of receipts with their respective descriptions.

a)	Given to the applicant when they pay a premium at time of application, which binds the insurance company if the risk is approved as applied for, subject to any other conditions stated on the receipt. If the applicant were to die before a policy is issued, the company will pay the death benefit but only if the policy would have been issued.
b)	Given by a company upon an applicant's first premium payment. The policy, if approved, becomes effective from the date of the receipt. If the applicant were to die before the policy is issued, the company will pay the death benefit whether or not the policy would have been issued (of course, subject to any limitations specified).
a) Conditional Receipt b) Binding Receipt (Lessons 5.5.4, 5.5.5)

Generally, if a receipt is issued when the initial premium deposit is collected, the would be considered the effective date of the policy. If the initial premium deposit is NOT collected and submitted with the application, the would be considered the effective date of the policy as long as the required premium payment is made within the appropriate timeframe.

Word bank: date of the receipt, date the policy is issued

Generally, if a receipt is issued when the initial premium deposit is collected, the date of the receipt would be considered the effective date of the policy. If the initial premium deposit is NOT collected and submitted with the application, the date the policy is issued would be considered the effective date of the policy as long as the required premium payment is made within the appropriate timeframe.

Lesson 5.5.6

Policy Issue and Delivery

Constructive Delivery is determined only when the policy is in the physical hands of the insured.

	a)	True
	b)	False
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Constructive Delivery is the point at which the insurer releases control of the contract to another party, such as the agent, for unconditional delivery to the insured.

	a)	True
	b)	False
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What must be given to a life insurance applicant when the agent receives an application and the initial premium?

The conditional receipt provides that when the applicant pays the initial premium, coverage is effective on the condition that the applicant proves to be insurable either on the date the application was signed or the date of the medical exam.

When an applicant applies for insurance the process?

When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called. underwriting; When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called underwriting.

What must be provided to the applicant by the agent when replacement occurs?

Both the applicant and agent must sign a Notice Regarding Replacement of Life Insurance. The agent must submit a copy of the notice and all sales materials used to the replacing insurer and must also give the applicant copies of the sales materials used.

Why should a producer collect a premium at the time the application is completed?

Why should a producer collect a premium at the time the application is completed? Collecting the premium at the time of application allows the producer to issue a conditional coverage receipt, which can bring coverage into effect as early as the date of the application, provided all the conditions have been satisfied.

When the first premium is collected at the time of application for a policy the effective date of coverage is?

Usually, a receipt is issued when the initial premium deposit is collected. Generally, the date of the receipt would be considered the effective date of the policy.

When the initial premium is not paid with the application what must the producer do before coverage can begin?

What action should a producer take if the initial premium is NOT submitted with the application? The correct answer is "Forward the application to the insurer without the initial premium". In this situation, the producer should submit the application to the insurance company without the premium.

Why should the agent personally deliver the policy when the first premium has already been paid?

Why should the producer personally deliver the policy when the first premium has already been paid? To help the insured understand all aspects of the contract.

What does it mean for an insurance policy to be delivered?

Policy delivery involves delivering the policy to the applicant and collecting any outstanding premium. Policies are usually delivered by an agent in person, but insurance companies may also permit delivery by registered mail or courier.