Rhode Island Life Insurance Practice Exam

What action should a producer take if the initial premium is NOT submitted with the application?

1. Return the application to the client

2. Forward the application to the insurer without the initial premium

3. Inform the client about the missing initial premium

4. Cancel the application process

The correct answer is: Forward the application to the insurer without the initial premium

When the initial premium is not submitted with the application, the required action is to forward the application to the insurer without the initial premium. This is often the established procedure in order to initiate the underwriting process. By submitting the application, the insurer can begin evaluating it and determining the risk associated with insuring the applicant. The insurer may then communicate with the applicant regarding the premium or any additional requirements for coverage. This process allows for seamless continuation of the insurance application, providing a necessary step in facilitating the relationship between the producer, the insurer, and the client, while ensuring that the application is officially entered into the system for tracking and evaluation. In contrast, simply returning the application to the client or informing the client about the missing premium would likely delay the process and may not provide the necessary next steps for moving forward with insurance coverage. Cancelling the application process is also not ideal, as it prevents the possibility of transitioning to the next steps once the premium is collected.