Completing the Application, Underwriting, Delivering Policies, Contract Law
An applicant plans to surrender an existing whole life policy after the new policy is issued. How should the replacement question be answered?
Answer and explanation
Answer: B. Replacement questions ask whether the applicant has existing life insurance or annuity contracts and whether the coverage applied for is intended to replace or change a contract in force. A planned surrender of the old policy makes the truthful answer yes.Source: Interstate Insurance Product Regulation Commission — Individual Life Insurance Application Standards — § 3.I. Replacement of Insurance (1)(a)–(b)
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