Initial Premium Payment in the Insurance Application

Instructions:

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question 1 of 3

Which kind of receipt is rarely used in the insurance market today?

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1. If Joe applies for a life insurance policy that has a monthly payment of $30, how much is his initial premium payment and when is it due?

2. What is typically the upper limit for a death benefit paid under a binding receipt for a death that occurs before the application is fully processed?

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About This Quiz & Worksheet

This short worksheet and quiz covers all you need to know about the initial premium payment in the insurance application. You'll be quizzed on the kinds of receipts used in the insurance market, the method used to calculate an initial premium payment and how insurability conditional receipts work.

Quiz & Worksheet Goals

Take this quiz to assess how well you know how to:

  • Identify the kinds of receipts used in the insurance market
  • Calculate an initial premium payment in an example problem
  • Specify the upper limit of a death benefit paid under a binding receipt and before the application is fully processed
  • Explain how an insurability conditional receipt works in an example problem

Skills Practiced

  • Knowledge application - use your knowledge to answer questions about the upper limit of a death benefit paid under a binding receipt
  • Reading comprehension - ensure that you draw the most important information from the related lesson on initial insurance premium payment
  • Making connections - use understanding of the concept of an insurability conditional receipt to explain what happens when an applicant dies
  • Knowledge application - use your knowledge to answer questions about how initial premium payments are calculated

Additional Learning

Be sure to check out our lesson titled Initial Premium Payment in the Insurance Application if you'd like to learn more about this subject. In addition to covering the topics found on this quiz, our lesson helps you:

  • Explain why approval receipts are not often used in the insurance market
  • Understand what happens to coverage if a policy holder's death does not meet the underwriting criteria
  • Detail when the initial premium payment is due as part of the application process
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