Question 8 (2 points)

Which of the following is the primary justification for an insurer to write life insurance on a nonmedical basis?

Question 8 options:1) Because savings in expenses are greater than the increased cost of the resulting extra mortality2) Because the MIB reports reliably how other companies have rated the applicant3) Because of the greater ease in completing sales when the ordeal of the medical examination is eliminated4) Because detailed nonmedical questionnaires can be just as thorough as a medical examination5) Because of the reduced burden placed on the time and talent of the medical professional

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Question 9 (2 points)

Ideally, the underwriting evaluation and classification system used by a company should meet all the following criteria, EXCEPT:

Question 9 options:1) Measure accurately the effect of each factor affecting the insurability of an applicant2) Assess the combined impact of interrelated factors, including those in conflict3) Produce equitable results4) Be relatively simple and inexpensive to operate5) Provide the insurer with a sound basis for reporting its final underwriting decision to the MIB

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Question 10 (2 points)

All of the following statements concerning the underwriting of life insurance for elderly applicants are correct, EXCEPT:

Question 10 options:1) The number of lives insured is too small to permit predictable mortality results.2) A high degree of adverse selection occurs.3) Life companies are writing fewer and fewer policies each year for the elderly.4) The medical exam for the elderly is relatively ineffective.

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Question 11 (2 points)

All of the following statements concerning the services provided to insurers by the Medical Information Bureau (MIB) are correct, EXCEPT:

Question 11 options:1) The MIB is a clearinghouse for data primarily of a medical nature on applicants for life insurance.2) The information is reported and maintained in code symbols.3) Member companies are required to report for all applicants any impairment designated on the Bureau’s official list.4) The member companies do not report to the MIB their underwriting decision concerning an applicant.5) The information provided by the MIB is so complete that many companies make their underwriting decision for nonmedical applicants solely on the basis of information provided by the MIB.