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Difficulty: MediumCompleting the Application

Agent Thomas is reviewing a completed disability income insurance application before submitting it to the insurer. He discovers that the applicant left a question regarding their secondary income source completely blank. Additionally, the applicant changed an answer regarding a previous surgery by crossing it out and writing a new response, but failed to initial the alteration. How must Thomas handle these issues to comply with proper application procedures?

  1. He must return the application to the applicant so they can provide an answer to the blank question and place their initials next to the altered response.Answer
  2. B
    He should submit the application in its current state, as the underwriter will assume the blank answer implies 'none' and the crossed-out answer is self-evident.
  3. C
    He is legally permitted to fill in the blank question if he knows the applicant's secondary income, but he must return the form for the initials on the alteration.
  4. D
    He can rely on his implied agent authority to initialize the alteration and complete the blank question on the applicant's behalf to expedite the underwriting process.

Answer

The agent must return the application to the applicant to complete the unanswered question and to provide their initials next to the altered medical answer.
The correct answer accurately states that an agent must never unilaterally alter an application or leave questions blank. The applicant must personally answer any overlooked questions and initial any corrections or changes made to the document to legally verify they authorized the new information.

Step-by-Step Solution

1
Identify the procedural errors in the submitted application scenario.
The application contains a blank (unanswered) question and a changed answer without the applicant's initials.
Recognizing incomplete or improperly altered sections is the primary responsibility of the agent during field underwriting.
2
Determine the agent's authority regarding application modifications.
An agent cannot legally fill in blanks, guess answers, or initial changes on behalf of the applicant.
The application is a legal document consisting of the applicant's representations, requiring the applicant's explicit, verifiable authorization for all information provided.
3
Determine the legally required corrective action.
The application must be returned to the applicant.
Returning the application ensures that the applicant personally answers all questions and authenticates any corrections, preventing future disputes over contract validity.

Key Concept

Handling Incomplete Applications and Alterations
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Topics

Completing the Application

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