An individual applies for a new life insurance policy, and a medical exam is required. The applicant decides to pay the first premium at the time of application. Arrange the following events in the correct chronological order, from first to last, to demonstrate the standard application and receipt process.
- 1The applicant submits the completed application and pays the initial premium.
- 2The agent issues a conditional receipt to the applicant.
- 3The applicant completes the required medical examination.
- 4The insurer underwrites the risk and approves the policy as a standard risk.
Answer
The correct sequence is: Application and premium submission, followed by the issuance of the conditional receipt, then the completion of the medical exam, and finally, policy approval.
The standard process when a premium is paid with the application begins with the submission of the application and money. The agent then immediately provides a conditional receipt. The applicant must then fulfill the conditions of the receipt by completing the required medical exam. Finally, the insurer reviews all information and approves the policy.
Step-by-Step Solution
Key Concept
The chronological sequence of the application process involving a conditional receipt.