Completing the Application, Underwriting, Delivering Policies, Contract Law
No premium accompanies an application, and no temporary coverage applies. The insurer issues the policy, but the owner has not accepted delivery or paid the first premium. What is the status under the application agreement?
Answer and explanation
Answer: D. Under the standard application agreement, company liability does not begin until the policy is issued, delivered to and accepted by the owner, and the first premium due is paid in full while each proposed insured is alive.Source: Interstate Insurance Product Regulation Commission — Individual Life Insurance Application Standards — § 3.K. Agreements (1)(d)(i)–(ii)
More completing the application, underwriting, delivering policies, contract law questions
- An applicant attempts to purchase a single-premium $500,000 life policy using multiple cashier's checks under $10,000 from different banks. What action is the insurer required to take under AML rules?
- An applicant completes an application and pays the initial premium with it. In contract terms, what has the applicant done?
- An applicant gives an insurer a Social Security number and income information to obtain personal life coverage. How does the GLBA Privacy Rule generally classify that information?
- An applicant is offered free coverage and a cash payment by investors who will own the policy after two years. What should the producer conclude?
- An applicant plans to surrender an existing whole life policy after the new policy is issued. How should the replacement question be answered?
- An applicant submits an application and initial premium for a preferred life insurance policy, but the insurer issues a standard-rated policy with a higher premium. In contract law, how is the issuance of this altered policy treated?
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