What term describes factual statements upon which an insurance policy is based?

The term that describes factual statements upon which an insurance policy is based is "representations." In the context of insurance, representations are the statements made by the applicant for insurance during the underwriting process. These statements are relied upon by the insurer when deciding whether to issue a policy and under what terms.

Representations must be truthful and accurate, as they form the foundation upon which the insurance contract is built. If a representation is found to be false or misleading, it could potentially affect the validity of the policy or lead to denial of a claim. It is crucial for policyholders to provide complete and honest information regarding the risks being insured, as this ensures mutual trust between the policyholder and the insurer.

Warranties, on the other hand, are promises that something is or will be true in the future and can lead to a breach of the contract if not upheld. Disclosures refer to the act of making known certain information, which is broader than just the factual statements upon which a policy is based. Exclusions pertain to specific conditions or circumstances that are not covered by the policy, which is different from the factual basis of the policy itself. Therefore, the correct term is representations, as these are the precise statements that influence the insurance contract.