Completing the Application, Underwriting, and Delivering the Policy
An applicant applies for preferred rates and the insurer issues a standard-rated policy instead. In contract terms, what has the insurer done?
Answer and explanation
Answer: C. Acceptance must match the offer, so issuing on different terms is a counteroffer that the applicant may accept, ordinarily by accepting delivery and paying the premium, or decline. It is not acceptance of the original offer, not an outright rejection, and not a change to a contract that does not yet exist.Source: Pearson VUE — Georgia Insurance Examination Content Outlines #121102 — Outline page S2, Offer and acceptance
More completing the application, underwriting, and delivering the policy questions
- Which statement best explains why a life insurance policy is legally considered a conditional contract?
- Which statement correctly separates the aleatory character of a life policy from its conditional character?
- Why do applications ask both about other coverage in force and about replacement intent?
- Why do the uniform standards require the city and state where an application is signed?
- Why does a change to an answer on a life application normally need the applicant's attention rather than the agent's alone?
- Why does the law require a life insurance contract to have a legal purpose?
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