Completing the Application, Underwriting, Delivering Policies, Contract Law
An application stipulates that coverage will not begin until the policy is delivered, accepted, and the first premium is paid. If the policy is delivered but the initial premium remains unpaid, why is the insurer not liable for a claim?
Answer and explanation
Answer: A. Because liability is expressly conditioned on several events, failure to pay the first premium means the condition has not been satisfied. This illustrates the conditional nature of insurance.Source: Interstate Insurance Product Regulation Commission — Individual Life Insurance Application Standards — § 3.K. Agreements (1)(d)
More completing the application, underwriting, delivering policies, contract law questions
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