In a life insurance transaction, the application:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
The application is the applicant's formal request for coverage and the source of the insured's statements. Under the entire-contract rule in CIC Section 10113, the application is made part of the policy when it is indorsed upon or attached to the policy, and all statements made by the insured are, in the absence of fraud, representations rather than warranties. Coverage does not exist merely because an application is signed; it is granted only after underwriting and policy delivery. The application is not a legal opinion, and it is not the policy, which Section 380 defines as the written instrument in which the contract is set forth.
Why the other options are wrong
- C) The policy is the written instrument that sets forth the contract under Section 380. The application is the request that precedes the policy and is not the policy itself. The controlling legal standard set out above demonstrates precisely why this option is incorrect.
- A) Signing an application does not guarantee coverage. The insurer must underwrite the application and accept the risk before coverage attaches. This choice misstates what the statute actually requires, so it must be eliminated from consideration.
- B) The application is a request for coverage and a source of the insured's statements. It is not a legal opinion prepared by an attorney. This option reflects a different rule and does not match the law that governs the transaction.
Memory hook
Application asks for coverage; the policy delivers it. Only attached papers become part of the contract.