Insurance Broker Certification Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Insurance Broker Certification Exam. Master the format with flashcards, multiple choice questions and explanations. Ensure success with our comprehensive materials!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What must occur after an offer is made in an insurance contract?

The insured must pay the premium
The insurer must accept the offer
The offer must be revised
The application must be denied

The correct answer is: The insurer must accept the offer

In the context of an insurance contract, once an offer is made by one party, it is imperative for the other party to accept that offer for a binding contract to be formed. This acceptance signifies the agreement of both parties to the terms and conditions laid out in the offer, creating a mutual obligation. For an insurance policy, this means that the insured party submits an application or proposal for coverage, which the insurer then reviews. The insurer must formally accept this offer, either by issuing a policy as requested, perhaps upon the receipt of the required premium. Without this acceptance, no contractual relationship exists, regardless of whether the insured is ready to pay the premium or if there are discussions to revise the offer. In summary, acceptance by the insurer of the insured's offer is a fundamental requirement to establish a legally binding insurance contract.