Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
After evaluating a life insurance application, the insurer's underwriter may take all of the following actions EXCEPT:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
The three standard underwriting outcomes are to issue the policy as applied for, to issue it with a rating or modification (such as a premium increase, a reduced face amount, or an exclusion), or to decline the application. An agent cannot secretly move an application to another insurer without the applicant's knowledge and consent. Changing insurers would present a different contract with different terms and rates, so the applicant must be informed and given the choice.
Why the other options are wrong
- A) Issuing the policy as applied for is the standard outcome when the applicant is found to be a standard or preferred risk.
- B) Issuing with a rate-up or modification is a normal underwriting result for substandard risks that are still acceptable.
- C) Declining the application is a recognized outcome when the risk is unacceptable to the insurer.
Memory hook
Underwriting has three exits: issue, modify, decline. Sneaking the file to another insurer is not an exit, it is misconduct.