Completing the Application, Underwriting, and Delivering the Policy
Why is a life insurance contract not formed where an application is signed but no premium is paid and no promise given?
Answer and explanation
Answer: C. A contract requires consideration, and until the applicant gives premium and statements and the insurer gives its promise, nothing has been exchanged. Notarisation is not required, agent appointment concerns authority to transact rather than contract formation, and a beneficiary designation is not an element of the contract.Source: Pearson VUE — Georgia Insurance Examination Content Outlines #121102 — Outline page S2, Consideration
More completing the application, underwriting, and delivering the policy questions
- 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?
- A policy is arranged so an unrelated investor can profit from a stranger's death. Which element of contract formation fails?
- A policy is delivered at a higher premium than illustrated because underwriting placed the insured in a different class. What should the producer do at delivery?
592 Georgia 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.