In most states, statements in the application are treated as representations rather than warranties.

• A. False
• B. True
• C. They are sometimes warranties
• D. They are always warranties

Answer: (B)

In life insurance, the information you provide on the application is treated as a representation rather than a warranty. A representation is a statement you believe to be true, not a guaranteed fact. A warranty, by contrast, is an absolute promise that something is true, and breaching a warranty can give the insurer the right to void the contract immediately. Because application statements are representations, the insurer uses them to assess risk but cannot automatically void coverage for every misstatement. If a misstatement is material or fraudulent, the insurer can contest the policy or adjust benefits, often within the contestability period (commonly the first two years). After that period, misstatements typically don’t void the policy, but benefits can be recalculated or reduced to what the premiums would have bought had the truth been known. For example, misstating age or health can lead to an adjusted death benefit or premiums, rather than an automatic cancellation. This reliance on representations explains why the statement is true.