Life & Health Insurance Practice Exam 2025 – Your All-in-One Guide to Exam Success!

An applicant is not required to inform their agent about a previous policy when the previous policy has lapsed because a lapsed policy is no longer active. When a policy lapses, it typically means that the coverage has ended, and the policyholder no longer has any financial obligation or benefits under that policy. Therefore, since there is no ongoing relationship or risk associated with the lapsed policy, it does not need to be disclosed during the application process for a replacement policy.

In contrast, if a previous policy is still in force, whether it is from the same or another company, or if the insured simply cannot recall the details, these circumstances often necessitate disclosure to ensure that the agent can accurately assess coverage needs, avoid any potential issues with underwriting, and comply with state regulations regarding policy replacements. The responsibility to inform the agent about relevant previous policies generally arises from the need to provide full transparency and context regarding the applicant's insurance history.