Chapter 2 Know This

Which type of life insurance policy distributes dividends to policyowners?

Participating policies

When must insurable interest exist in life insurance?

At the time of application.

Who must the policyowner have insurable interest in?

The life of the insured.

What kind of information does a buyer's guide provide?

Generic information on various types of policies.

What kind of information does a policy summary provide?

Specific information on the policy being issued.

What role does a life insurance producer fill for the company in the underwriting process?

The company's field underwriter.

What does a conditional receipt mean regarding coverage effective date?

The applicant may be covered as early as the date of the application.

What is the key source underwriters use for information about the applicant?

An insurance application

Can insurers refuse coverage solely based on adverse MIB report information?

Insurers cannot refuse coverage.

How does risk relate to insurance premium?

The higher the risk, the higher the premium.

What is the rule regarding premium payment and coverage?

NO premium, NO coverage.