Completing the Application, Underwriting, Delivering Policies, Contract Law
What does the applicant give as consideration in forming a life insurance contract?
Answer and explanation
Answer: A. The applicant's consideration is the first premium plus the representations in the application. The insurer's consideration is its promise to pay benefits under the policy terms.Source: NAIC Life Insurance Buyer's Guide — The policy as a contract: consideration of the parties
More completing the application, underwriting, delivering policies, contract law questions
- After signing an application but before policy delivery, the proposed insured begins taking a newly prescribed heart medication. What should the proposed insured do?
- An adult applies for a policy on his own life and names his sister as beneficiary. Whose signatures does the application ordinarily require?
- An agent observes unusual funding behavior while selling a covered life product. What is the agent's proper AML role?
- An applicant applies without paying any premium. The insurer issues the policy exactly as requested. When is the contract formed?
- 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?
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.