PSI Life Exam Practice Test

Specific statements made on an application that the insured guarantees to be TRUE are known as what?

1. endorsements

2. warranties

3. declarations

4. provisions

The correct answer is: warranties

The correct answer is warranties. In the context of insurance applications, warranties refer to specific statements or representations that an applicant guarantees to be true. These statements are crucial because they serve as the foundation upon which the insurance contract is built. If a warranty is found to be untrue, it can affect the validity of the contract and may lead to the denial of a claim or cancellation of the policy. Warranties differ from other terms such as endorsements, which modify the policy but do not pertain to the accuracy of the statements on the application; declarations, which provide essential information about the insured and the coverage but do not carry the guarantee of truthfulness; and provisions, which are the clauses within the policy that outline the rights and responsibilities of both the insurer and the insured, rather than specific statements made in the application phase.