Question 63

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

When an insurer approves an incomplete application, it effectively waives its right to the missing information and is obligated to honor the contract as issued, despite the application being incomplete.

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

This option is incorrect because if the insurer has approved the incomplete application, it cannot later impose conditions based on missing information. The approved policy stands as is, without further review needed for the death benefit.

B) The agent can at any time during the term of the policy complete the application.

This statement is not accurate. Once the insurer has approved the incomplete application, the agent cannot retroactively complete it; the policy is already in effect based on the terms as they were approved.

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

This statement is correct. The insurer's approval of the incomplete application means it accepts the terms without the missing information and must fulfill its obligations under the contract.

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

This option is misleading. The insured is not required to complete the application after the policy has been issued because the insurer has already accepted the incomplete application and issued the policy based on that acceptance.

Conclusion

The correct answer is that the insurer waives the right to the missing information and must honor the contract. All other options incorrectly suggest conditions or requirements that do not apply once the insurer has accepted an incomplete application, which fundamentally alters the contractual obligations of the insurer.