Question

Statements made by an applicant for a life insurance policy that are true to the best of the applicant's knowledge are referred to as ____.

1) Facts
2) Warranties
3) Information
4) Representations

Answer 1

In insurance, statements by an applicant that are believed to be true are called representations. These differ from warranties, which are guarantees of truth, and facts, which are proven to be true.

Step-by-step explanation:

Statements made by an applicant for a life insurance policy that are true to the best of the applicant's knowledge are referred to as representations. In the context of insurance, a representation is a statement that the applicant believes to be true, and which they communicate to the insurer during the policy application process. It is not as strong as a warranty, which is an absolute guarantee of truth. Representations, if discovered to be false, can lead to the voiding of the policy, but this is only if the false statement is material to the acceptance of risk by the insurer. The distinction between a representation and a fact is that a fact is something proven to be true, while a representation is believed to be true but may not necessarily have been verified or may not be verifiable.