Match the following insurance application scenarios and documents with their correct outcomes or definitions regarding the effective date of coverage.
- Applicant pays the initial premium at the time of application.Coverage generally becomes effective on the application or medical exam date.
- Applicant does not pay the initial premium until the policy is delivered.Coverage becomes effective upon policy delivery and premium payment.
- Document required at delivery when no premium was collected with the application.Statement of Good Health.
- Document provided to an applicant who pays the premium at the time of application.Conditional Receipt.
Answer
The correct pairings match premium payment timing with its corresponding effective date rule, and identify the specific documents (Statement of Good Health vs. Conditional Receipt) used in each scenario.
The correct pairings accurately reflect state insurance regulations regarding policy effective dates. When money is collected upfront, a Conditional Receipt is given and coverage can start immediately (conditionally). When money is collected at delivery, coverage starts at delivery, and a Statement of Good Health must be signed to ensure the applicant is still insurable.
Step-by-Step Solution
Key Concept
Effective Date and Statement of Good Health