Which of the following is a possible underwriting outcome for a life insurance application?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
After evaluating the application, the insurer may approve the policy at standard rates, approve it with an extra premium, rated or substandard, approve it with an exclusionary rider, postpone the decision pending further information, or decline the application. The applicant is notified of the decision, and the producer communicates and explains the result. A postponement is used when the risk cannot yet be evaluated, such as awaiting additional medical records. Each outcome affects the applicant's coverage and premium. The producer must present the insurer's decision accurately and fairly.
Why the other options are wrong
- No underwriting outcome guarantees premium refunds at retirement; such a feature would belong to specific contract provisions, not underwriting.
- Insurance is not equity; the applicant buys a contract of insurance, not stock in the insurer.
- Becoming an agent is unrelated to an underwriting decision on a life insurance application.
Memory hook
Underwriting answers: yes (standard), yes-but (rated or rider), not now (postpone), or no (decline).