Completing the Application, Underwriting, and Delivering the Policy
In a life insurance contract, what does each side supply as consideration?
Answer and explanation
Answer: C. Consideration is what each party gives in exchange for the other's promise: the applicant's premium together with the statements made in the application, and the insurer's promise to pay benefits on the terms of the contract. Underwriting, a policy number, and a beneficiary designation are steps in the process rather than the exchange itself.Source: Pearson VUE — Georgia Insurance Examination Content Outlines #121102 — Outline page S2, Elements of a contract
More completing the application, underwriting, and delivering the policy questions
- A corporation is applying to own a life insurance policy. Which signature best evidences a competent party acting on behalf of the corporation?
- A health provider receives a valid HIPAA authorization directing disclosure of specified records to a life insurer for underwriting. How does HIPAA's minimum-necessary standard apply to that authorized disclosure?
- A life application authorizes the insurer to obtain information from a third-party provider but does not describe the information or provider type. What is missing?
- A life insurance policyowner may stop paying premiums at any time without legal penalty, but the insurer is legally bound to pay the death benefit if the insured dies while the policy is in force. This situation best illustrates which legal characteristic of an insurance contract?
- A new owner finds part of the delivered policy unclear. What does consumer guidance direct?
- A parent applies for life insurance on a 9-year-old child. Who must sign the application besides the producer?
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