Life License Qualification Program (LLQP) Practice Exam

Which provision in a policy states that the application and policy together form the complete contract between the insured and insurer?

1. Insuring clause

2. Entire Contract provision

3. Time Limit on Certain Defense provision

4. Legal Contract clause

The correct answer is: Entire Contract provision

The Entire Contract provision is a fundamental concept in insurance policies, stipulating that the written policy and the application constitute the complete and sole agreement between the insurer and the insured. This means that all the terms, conditions, and representations contained within these documents are binding and represent the full understanding of both parties. By including this provision, the insurer ensures that any verbal agreements or representations made outside of the written documentation do not impact the terms of the policy. This helps to protect both the insurer and the insured by preventing misunderstandings or disputes regarding coverage, benefits, or obligations that are not explicitly stated in the contract. Other choices reference aspects relevant to insurance but do not embody the comprehensive nature of the contract formed by the application and policy. The insuring clause mainly outlines the coverage provided, while the Time Limit on Certain Defense provision relates to limitations that may restrict the insurer's ability to contest a claim after a certain period. The Legal Contract clause, though it may suggest the validity of the contract, does not specifically define the relationship between the application and the policy like the Entire Contract provision does.