The agent who takes a life insurance application acts as a field underwriter. Which of the following is part of the agent's field underwriting duties?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Field underwriting is the first step in the underwriting process. The agent asks health and lifestyle questions, completes the application accurately, collects the initial premium, and reports observations about the applicant's character and risk to the home office. The agent's report helps the insurer decide whether to issue the policy. Final risk classification, premium setting, and the appointment of examiners are functions of the home office underwriters, not of the field agent. Because field underwriting happens before the home office review, an inaccurate application or a missed hazard can never be caught later; the agent's thoroughness is therefore the quality of the entire underwriting process.
Why the other options are wrong
- B) The final acceptance or rejection of risk is the home office underwriter's decision; the agent's role is preliminary fact gathering. The agent gathers facts and reports them; only the home office decides whether to accept the risk.
- C) Premium rates are set by the insurer's actuaries and underwriting guidelines, not by the field agent. Pricing is an actuarial and company policy function entirely separate from the agent's field duties.
- D) The insurer arranges medical examinations through its own process; that is not a field underwriting duty of the agent. Examiners are arranged by the insurer's underwriting department, not by the producing agent.
Memory hook
Agent = scout who files the facts; home office = judge who stamps the risk.