Colorado Life Producer License Practice Test

Under what circumstance would an insured need to sign a statement of good health?

1. When insurance premiums increase

2. Upon policy renewal every year

3. Upon delivery of the policy if it was prepaid

4. During the initial consultation

The correct answer is: Upon delivery of the policy if it was prepaid

An insured typically needs to sign a statement of good health upon delivery of the policy if it was prepaid to confirm that their health has not changed since the application was submitted. This is crucial because the insurer is relying on the accuracy of the health information provided during the application process. If there are any significant changes in the insured's health status, it could affect the underwriting decision or the terms of the policy. In cases where the premium has been paid in advance, the insurer requires this statement to ensure that the risk they are taking on has not changed negatively. This process protects both the insurance company and the insured, as it helps maintain the integrity of the underwriting process. Other scenarios, such as premium increases, policy renewals, or initial consultations, do not typically trigger the need for signing a statement of good health. Premium increases may come from adjustments in risk classification rather than health status. Renewals are based on the prior coverage and may involve different processes based on existing health. Initial consultations are preliminary discussions where health information is gathered, but no formal statement regarding the current health status is confirmed at that stage.