Difficulty: Easy

Average Score: 100%

What is the result of an Insurer approving an incomplete application?

Rationale

The insurer waives the right to that information and must honor the contract.

When an insurer approves an incomplete application, they forgo their right to require additional information related to the application and are obligated to uphold the terms of the contract as it stands. This means that the insurer cannot later deny a claim based on information that was not supplied at the time of approval.

A (The death benefit will be subject to review upon the death of the insured.) YOUR ANSWER

If the insurer has approved an incomplete application, they cannot later claim the right to review the application upon the death of the insured. This option implies that the insurer retains a right to re-evaluate the application, which contradicts the principle that they have waived such rights by approving the contract.

B (The agent can at anytime during the term of the policy complete the application.) YOUR ANSWER

Once an insurer has accepted an incomplete application, the agent cannot unilaterally complete the application later. The approval indicates that the insurer has accepted the terms as they are, and any changes or completions would require the insurer's consent.

D (The insured must complete the application after the policy has been issued.) YOUR ANSWER

This statement is incorrect because, upon approval of an incomplete application, there is no requirement for the insured to complete the application after the policy has been issued. The approval signifies that the insurer has accepted the current state of the application, and no further completion is mandated.

Conclusion

In summary, when an insurer approves an incomplete application, they effectively waive their right to additional information and must honor the contract as it exists. This understanding is crucial in insurance practices, ensuring that both the insurer and the insured have a clear agreement, regardless of the completeness of the initial application.

Related Questions

View all