Minnesota Life Insurance License Practice Exam

The proposed insured's statements on a life insurance application are considered what?

1. Warranties

2. Representations

3. Affidavits

4. Guarantees

The correct answer is: Representations

The statements made by a proposed insured on a life insurance application are classified as representations. This classification indicates that the insured is providing information to the best of their knowledge and belief at the time of application. The purpose of these representations is to help the insurer assess the risk associated with insuring the individual. Representations are different from warranties, which are absolute statements that must be true, and any falsehood can void the contract. In the context of insurance, warranties are not typically used to describe information provided by the insured, as it is generally accepted that applicants may not have complete knowledge of all the facts relevant to their health and lifestyle. Affidavits, on the other hand, refer to sworn statements usually intended to be submitted as evidence in court or legal contexts and are not relevant to the life insurance application process. Similarly, guarantees imply a promise or assurance about a future occurrence but do not accurately describe the nature of the statements made on an insurance application. Hence, the classification of these statements as representations allows for a degree of flexibility while still holding the insured accountable for truthful answers.