Question 84

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

When an insurer approves an incomplete application, it indicates that they accept the application as it stands, thereby waiving their right to later contest the missing information. This means the insurer is obligated to honor the contract as it has been issued.

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

This option is incorrect because once the insurer approves an incomplete application, they cannot later review the information to contest the death benefit. The approval signifies that the insurer accepts the terms without further scrutiny of the incomplete details.

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

This statement is false because the ability to complete the application after approval does not apply. The insurer's acceptance of the incomplete application means that the contract is binding as is, and the agent cannot retroactively change the terms.

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

This option accurately reflects the situation. By approving an incomplete application, the insurer relinquishes their claim to the missing information and must adhere to the terms of the contract as issued, making it the correct choice.

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

This is incorrect as well; the insured is not obligated to complete the application once the insurer has approved it. The approval signifies that the insurer accepts the risk based on the incomplete information provided.

Conclusion

The correct answer is C because it illustrates the insurer's obligation to honor the contract despite the application being incomplete. Options A, B, and D misinterpret the implications of the insurer's approval, while C succinctly captures the essence of the insurer's acceptance of the application as it stands.