Life & Health Insurance Exam (National Portion)General InsuranceMedium
A life insurance applicant intentionally provides false information about their medical history to an agent, hoping to secure a lower premium. This action is an example of what type of insurance principle violation?
- AMisrepresentation
- BAdhesion
- CEstoppel
- DWaiver
Show answer & explanationAnswer & explanation
Correct answer: A. Misrepresentation
Providing false information on an insurance application is a clear example of misrepresentation, as the applicant is making untrue statements of material fact.
Why the other options are wrong
- B. Adhesion refers to the 'take-it-or-leave-it' nature of insurance contracts, not applicant dishonesty.
- C. Estoppel prevents someone from asserting a right or fact inconsistent with a previous position or representation.
- D. Waiver is the voluntary relinquishment of a known right, not an act of deception by an applicant.
Misrepresentation
A false statement of a material fact made by an applicant for insurance. If intentional and material, it can lead to contract voidance.
- Must be a statement of fact, not opinion.
- Must be false.
- Must be material to the insurer's decision.
- Can be innocent or intentional.
Memory trick: Don't lie on the form, or your policy won't be warm!