Question

The producer realizes that the prospective client omitted information about a prior illness. What should the producer do?

A. Ignore the omission and proceed with the application.

B. Disclose the omission to the insurer and proceed with the application.

C. Disclose the omission to the insurer and refuse to proceed with the application.

D. Advise the client not to disclose the omitted information.

Answer 1

The correct action for a producer when detecting an omission about a prior illness is to disclose it to the insurer and continue with the application process, ensuring all information is complete and accurate.

Step-by-step explanation:

When a producer realizes that a prospective client has omitted information about a prior illness, the ethically and legally correct action to take is B. Disclose the omission to the insurer and proceed with the application. It is the producer's responsibility to ensure that all information provided to the insurer is complete and accurate. Omitting such information could be considered insurance fraud, which can have severe legal consequences for both the producer and the client. Moreover, it is important for the insurer to have all pertinent information to assess risk accurately and determine appropriate coverage terms and premium rates.