Completing the Application, Underwriting, Delivering Policies, Contract Law
An applicant will keep an existing policy nominally in force but reduce its face amount to fund the new policy. Which replacement disclosure is appropriate?
Answer and explanation
Answer: C. The replacement inquiry is not limited to full surrender or a change of insurer. It asks about existing contracts and whether the insurance applied for is intended to replace or change any contract in force, so the planned reduction must be disclosed.Source: Interstate Insurance Product Regulation Commission — Individual Life Insurance Application Standards — § 3.I. Replacement of Insurance (1)(a)–(b)
More completing the application, underwriting, delivering policies, contract law questions
- An applicant is offered free coverage and a cash payment by investors who will own the policy after two years. What should the producer conclude?
- An applicant plans to surrender an existing whole life policy after the new policy is issued. How should the replacement question be answered?
- An applicant submits an application and initial premium for a preferred life insurance policy, but the insurer issues a standard-rated policy with a higher premium. In contract law, how is the issuance of this altered policy treated?
- An applicant submits an application with the initial premium, making an offer to buy coverage. The insurer issues the policy exactly as applied for. Which contract formation element is most directly demonstrated by the insurer's issuance of the policy?
- An applicant submits an application without premium. The policy is issued as applied for. Before delivery and premium collection, the applicant suffers a severe heart attack. What must the producer do at delivery?
- An applicant submits truthful application statements and the required initial premium. What does the insurer furnish as its side of the contract's consideration?
590 Texas questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.