West Virginia State Life Insurance Practice Exam

Which of the following actions is necessary if changes are made to a life insurance application?

1. Producers do not need to notify the applicant

2. Applicant must reapply

3. Applicant's initials are required on the changes

4. No further action is needed

The correct answer is: Applicant's initials are required on the changes

When changes are made to a life insurance application, it is essential for the applicant to initial the changes. This requirement serves multiple purposes. Firstly, it ensures that the applicant acknowledges and agrees to the modifications, confirming their intent and understanding of the new information being submitted. Secondly, the applicant's initials provide a clear record that the changes were made with their consent, which is crucial for preventing disputes regarding the policy later on. Having the applicant's initials on changes protects both the insurer and the insured by ensuring that there is clear documentation of what was altered, thereby reinforcing the integrity of the application process. This practice promotes transparency and helps maintain trust between the insurance company and the policyholder, as any modifications will be clearly marked and accepted by the applicant themselves. Without this acknowledgment, there could be confusion or disagreements about the terms of the policy down the line.