Maryland Life and Health Insurance License Practice Exam

What is a requirement for any change made to an insurance application?

1. The applicant must provide a reason for the change

2. Change must be initialed by the applicant

3. The agent must sign off on the change

4. Changes must be dated

The correct answer is: Change must be initialed by the applicant

When a change is made to an insurance application, it is essential for the applicant to initial the change. This requirement serves as a method of verification, confirming that the applicant acknowledges and agrees to the modification being made. Initialing also helps maintain the integrity of the application process, as it prevents unauthorized alterations and ensures that the applicant is aware of and consents to the specific changes. This practice is important for documentation purposes in the event of any future disputes or inquiries regarding the application. It demonstrates that there was a mutual agreement on the adjustments and helps uphold transparency between the applicant and the insurance company. Therefore, initialing changes helps protect both the applicant and the insurer, making it a standard and necessary practice in the insurance application process.