Chartered Life Underwriter Practice Exam 2025 – All-In-One Guide to Secure Your CLU Success!

When applying for life or health insurance, it is typical for the insurer to review and report on the medical history of the applicant. This process is essential because it helps the insurance company assess the risk associated with insuring the applicant. Understanding the applicant's medical background enables the insurer to make informed decisions regarding coverage, premiums, and any potential exclusions that might need to be included in the policy.

This is crucial in determining the appropriate level of underwriting risk, as individuals with pre-existing conditions or significant medical histories may present higher risks, impacting the policy terms. This information may be gathered through medical records, health questionnaires, and in some cases, a medical examination.

The other options, while they depict aspects of insurance applications, do not accurately represent the standard practice of the insurance application process. Financial history is usually reviewed to understand the applicant's financial stability and need for coverage, which can play a role in the overall underwriting process. Insurers typically contact the applicant for clarification or further information, ensuring all necessary information is accurate and complete. Moreover, immediate policy approval without checks undermines the due diligence that insurers conduct to mitigate risks associated with providing coverage.