Question 8012 of 303 · California Life-Only Agent Exam

The consideration clause in a life policy states that

Exactly one answer is correct.

Athe policy is issued in exchange for the application and premium
Bthe insurer will refund all premiums at the owner's request any time
Cthe owner will receive a dividend payment from the insurer each year
Dthe beneficiary must pay income taxes on the proceeds received

Show solution

Correct answer to question 8012

A: the policy is issued in exchange for the application and premium

Explanation

Consideration is the value each party gives: the application and premium from the owner, and the promise to pay from the insurer.