New York State Life Insurance Exam Questions Practice Question
Competency of an individual to enter into an insurance contract is determined based on
Correct Answer: A
Rationale: Competency to enter into an insurance contract primarily hinges on legal age, as individuals must be of a certain age to understand and consent to the terms. Legal purpose (B) is essential for the contract's validity but does not determine an individual's competency. Ownership (C) relates to the policyholder's rights but is not a factor in competency. Payment of premium (D) is necessary for maintaining the contract but does not reflect the individual's capacity to enter into the agreement. Thus, legal age is the key factor in establishing competency.
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