Insurance Broker Certification Practice Exam

When does an offer typically occur in insurance?

1. When the insurer sends a policy to the applicant

2. When the applicant submits an application to the insurer

3. When the insured pays the premium

4. When the insurance agent presents the policy

The correct answer is: When the applicant submits an application to the insurer

In the context of insurance, an offer typically occurs when the applicant submits an application to the insurer. This step indicates the applicant's interest in obtaining coverage and reflects their intent to enter into a contract. The application serves as a vehicle for the applicant to communicate the necessary details about themselves and the coverage they are seeking. Once the application is submitted, it initiates the process where the insurer reviews the information and assesses the risk before deciding whether or not to extend coverage. The offer from the insurer is made after this review, usually in the form of a policy proposal, which includes terms, conditions, and pricing. The other options tend to represent subsequent steps in the insurance process, such as the insurer's response or actions taken after the initial offer has been made.