Tennessee Life Producer Practice Exam

Which part of a life insurance policy is always guaranteed to be true?

1. Discretion

2. Warranty

3. Representation

4. Constitutionality

The correct answer is: Warranty

In the context of a life insurance policy, a warranty is a statement or condition that is guaranteed to be true. When an insurer accepts a warranty, it attaches significant importance to the accuracy of the information presented. If a warranty is found to be false, it can provide grounds for the insurer to deny a claim or rescind the policy altogether. Warranties are binding, especially in the context of life insurance, as they are fundamental to the terms of the contract. In contrast, representations are statements that are believed to be true to the best knowledge of the applicant, but they do not carry the same guarantee as warranties; a misrepresentation may not always void the contract unless it is proven to be material or fraudulent. Discretion refers to the leeway given in decision-making, but it does not pertain to the guarantees in the policy. Constitutionality does not relate directly to the specifics of an insurance policy or its truth claims. Therefore, warranties stand out as the aspects that must always be upheld and confirmed as true within life insurance agreements.