Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
After underwriting review, the home-office underwriter may do all of the following EXCEPT:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The possible underwriting outcomes are: issue the policy as applied at a standard rate, issue at a preferred classification, issue with a higher rated premium for substandard risks, or decline or postpone coverage. No underwriter can guarantee that a policy will never lapse, because lapse depends on the policyowner paying premiums and, on flexible products, on the cash value funding monthly charges. Lifetime coverage assurances exist only through policy provisions such as nonforfeiture and no-lapse guarantees, not as an underwriting decision.
Why the other options are wrong
- B) Issuing at a standard or preferred rate is a routine underwriting decision when the risk is favorable.
- C) A rated policy with an extra premium is a standard response to substandard mortality risk.
- D) Declining or postponing is the insurer's right when the risk is unacceptable or information is incomplete.
Memory hook
Underwriting outcomes: issue, rate, decline, postpone. Never guarantee no lapse.