Indiana State Life and Health Insurance Practice Exam

At what point must a life insurance applicant be informed of their rights under the Fair Credit Reporting Act?

1. Before the appointment is scheduled

2. Upon completion of the application

3. At the policy's delivery

4. When the insurer receives the MIB report

The correct answer is: Upon completion of the application

A life insurance applicant must be informed of their rights under the Fair Credit Reporting Act upon completion of the application. This requirement ensures that applicants have a clear understanding of their rights regarding the information that will be collected and used during the underwriting process. The Fair Credit Reporting Act mandates that consumers be notified about their rights to access and dispute the contents of their consumer reports. Providing this information at the time of application completion ensures that the applicant is adequately informed before any further steps are taken in the underwriting process, allowing them to understand how their information will be handled and their rights regarding that information. This step is critical in maintaining transparency between the insurer and the insured, fostering trust in the insurance process.