Completing the Application, Underwriting, Delivering Policies, Contract Law
An applicant applies without paying any premium. The insurer issues the policy exactly as requested. When is the contract formed?
Answer and explanation
Answer: D. With no premium submitted, the insurer's issuance is an offer. The applicant accepts by paying the initial premium at delivery, and the usual good-health condition must be satisfied.Source: Interstate Insurance Compact — Individual Life Insurance Application Standards, effective date of coverage
More completing the application, underwriting, delivering policies, contract law questions
- Who must sign a life insurance application when an adult purchases insurance on their own life?
- Why does the law require a life insurance contract to have a legal purpose?
- Why is a life insurance contract void if issued to a policyowner who has no insurable interest in the insured?
- Why is a life insurance policy classified as an aleatory contract?
- Why is an insurance contract classified as a conditional contract?
- Why should a producer provide a policy summary and buyer's guide to an applicant at or before policy delivery?
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