A producer completes a life insurance application with a new client and provides a conditional receipt. For coverage to become effective retroactively to the date of the application or medical exam, which of the following requirements must be satisfied? (Select all that apply.)
- The initial premium must be submitted along with the application.Answer
- The insurer's underwriters must determine the applicant was insurable as a standard or preferred risk on that date.Answer
- CCoverage must be guaranteed unconditionally from the exact moment the receipt is issued.
- DThe applicant must sign a Statement of Good Health to activate the receipt.
Answer
The initial premium must be submitted with the application, and the applicant must be found insurable as a standard or preferred risk on that date.
A conditional receipt provides retroactive coverage only if the applicant pays the initial premium upfront and is ultimately deemed insurable by the company under its standard underwriting rules as of the application or medical exam date.
Step-by-Step Solution
Key Concept
Conditional Receipts and Initial Premium