Completing the Application, Underwriting, Delivering Policies, Contract Law
Two same-age applicants seek identical coverage. One has a serious health condition and regularly skydives. Why may that applicant receive a higher rate?
Answer and explanation
Answer: A. TDI explains that life insurance cost depends on age, health, and other risk factors and that an insurer may charge more for health conditions or risky hobbies such as skydiving. Risk classification aligns premium with expected risk.Source: Texas Department of Insurance — Life Insurance Guide — How do I get life insurance?; How much does life insurance cost?
More completing the application, underwriting, delivering policies, contract law questions
- An applicant submits an application without premium. The policy is issued as applied for. Before delivery and premium collection, the applicant suffers a severe heart attack. What must the producer do at delivery?
- An applicant submits truthful application statements and the required initial premium. What does the insurer furnish as its side of the contract's consideration?
- An applicant will keep an existing policy nominally in force but reduce its face amount to fund the new policy. Which replacement disclosure is appropriate?
- An applicant with average health, normal build, and no hazardous hobbies is classified into which standard underwriting category?
- An applicant with superior health, excellent family history, and non-smoker status is placed in which underwriting risk class, receiving lower premium rates?
- An application stipulates that coverage will not begin until the policy is delivered, accepted, and the first premium is paid. If the policy is delivered but the initial premium remains unpaid, why is the insurer not liable for a claim?
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