Life License Qualification Program (LLQP) Practice Exam

What must be done when an applicant makes a mistake on their insurance application?

1. Only the agent can correct it

2. The applicant must initial the correction

3. Submit a new application

4. Notify the insurance company immediately

The correct answer is: The applicant must initial the correction

When an applicant makes a mistake on their insurance application, the correct procedure is for the applicant to initial the correction. This is important as it shows that the applicant acknowledges the error and consents to the amendment. By initialing the correction, the applicant confirms that the change is valid and that they are aware of what is being modified in their application, which helps maintain the integrity of the application process. Initialing corrections is a standard practice to prevent any ambiguity regarding what was altered. It also serves as a safeguard against fraudulent changes, ensuring that both the applicant and the insurance company have a clear record of the application's final content. Additionally, it supports compliance with regulatory requirements, as insurance applications must reflect accurate and truthful information from the applicant. The other options pertain to misunderstandings of the correction process in insurance applications. While the agent may assist in making corrections, they do not have unilateral authority to correct the application without the applicant's involvement. Submitting a new application is unnecessary if the error can be easily amended. Finally, while notifying the insurance company could be necessary for other types of issues, it is not a required step simply for correcting a mistake, as long as the applicant appropriately initialed the correction.