This Type of Binder Implies That Coverage Exists Only If

question 59

Multiple Choice

This type of binder implies that coverage exists only if the underwriter ultimately accepts the application for insurance.Thus, if the applicant dies prior to the final policy issuance, payment is made if the applicant would have been acceptable to the insurer as an insured.Identify this type of binder.

• A)Facultative binder
• B)Conditional binder
• C)General binder
• D)Estoppel
• E)Waiver

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Definitions:

Compounded Semiannually

The calculation of interest where the interest earned over a period is added to the principal, and the process is repeated twice a year.

Gross Debt Service Ratio

A financial ratio that compares an individual's monthly housing costs (including mortgage payments, property taxes, and utilities) to their gross monthly income, used by lenders to assess borrowing capacity.

Gross Monthly Income

The total amount of income earned in a month before taxes and deductions.

Compounded Monthly

Interest or returns on an investment are calculated and added to the principal amount every month.