Life & Health Insurance Practice Exam 2025 - Free Practice Questions and Study Guide

When an applicant makes a mistake on an insurance application, the appropriate action for the agent is to ask the applicant to cross out the mistake and initial the change. This method ensures that the correction is clear and acknowledges the applicant's awareness and consent regarding the change. Initialing next to the correction serves as a form of verification that the applicant has seen the amended information and agrees to it, which helps maintain the integrity of the application process.

This practice is crucial because any alterations must be transparent and documented properly, ensuring that both the applicant and the insurer have a mutual understanding of the details provided. By directly involving the applicant in the correction process, it minimizes the risk of misunderstandings or disputes about what was originally reported.

Other responses do not adequately uphold the significance of proper procedure with regards to clarification and acknowledgment. Rewriting the entire application may be unnecessary and burdensome, filling out the correction on behalf of the applicant could lead to issues of representation and accuracy, and ignoring minor mistakes might lead to complications later during underwriting or claims processing.