Completing the Application, Underwriting, Delivering Policies, Contract Law
A statement in a life insurance application is treated as a representation rather than a warranty. What must an insurer show to contest the policy on that basis?
Answer and explanation
Answer: B. Application statements are representations, believed true to the best of the applicant's knowledge. To rescind, the insurer must show the statement was both false and material to acceptance of the risk.Source: NAIC Life Insurance Buyer's Guide — Applications: representations, materiality, and contestability
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