Completing the Application, Underwriting, Delivering Policies, Contract Law
An applicant submits truthful application statements and the required initial premium. What does the insurer furnish as its side of the contract's consideration?
Answer and explanation
Answer: C. The insurer's consideration is its promise to perform according to the policy, including paying the covered death benefit when contractual conditions are met. It does not guarantee dividends or erase exclusions.Source: National Association of Insurance Commissioners — Life Insurance Buyer's Guide — PDF page 3, Understand What Life Insurance Is
More completing the application, underwriting, delivering policies, contract law questions
- Why is a life insurance policy classified as an aleatory contract?
- Why is an insurance contract classified as a conditional contract?
- Why should a producer provide a policy summary and buyer's guide to an applicant at or before policy delivery?
- A client applies for life coverage without a temporary receipt. The insurer approves and issues the policy as applied for. Under standard application provisions, when does company liability actually begin?
- A consumer report plays a small part in an insurer's decision to charge a higher life premium. What does the FCRA require?
- A corporation is applying to own a life insurance policy. Which signature best evidences a competent party acting on behalf of the corporation?
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