Completing the Application, Underwriting, Delivering Policies, Contract Law
If an insurer issues a policy based on an incomplete application containing unanswered questions, what legal doctrine prevents the insurer from denying a claim later based on those missing answers?
Answer and explanation
Answer: A. By issuing a policy with missing answers, the insurer waives the right to that information and is estopped from denying claims on that basis.Source: IIPRC Application Standards / Texas Contract Law — § 3.K. Incomplete Applications
More completing the application, underwriting, delivering policies, contract law questions
- An applicant asks whether every answer on a life application is an absolute guarantee of literal accuracy. Which response is correct?
- An applicant attempts to purchase a single-premium $500,000 life policy using multiple cashier's checks under $10,000 from different banks. What action is the insurer required to take under AML rules?
- An applicant completes an application and pays the initial premium with it. In contract terms, what has the applicant done?
- An applicant gives an insurer a Social Security number and income information to obtain personal life coverage. How does the GLBA Privacy Rule generally classify that information?
- 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?
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