On April 22nd, a 28-year-old physical therapist completes an application for a whole life insurance policy. The producer collects the initial premium and provides a conditional insurability receipt. The insurer requires a routine medical examination for this policy amount, which is scheduled for April 28th. Tragically, the applicant dies in an automobile accident on April 25th. Based on these circumstances, what is the insurer's obligation regarding the claim?
- It will deny the claim and return the premium because the required medical examination was not completed prior to death.Cevap
- BIt will pay the claim because the conditional receipt provided immediate unconditional coverage the moment the premium was collected.
- CIt will pay the claim because the applicant provided full consideration by submitting both the application and the initial premium.
- DIt will pay the claim because the producer exercised implied authority to bind the company when accepting the money.
Cevap
The insurer will deny the claim and refund the premium because the required medical examination was not completed, meaning the conditions for coverage to begin were never met.
Under a conditional insurability receipt, if a medical examination is required, coverage does not become effective until the date of the application or the date of the medical exam, whichever is later. Because the applicant died prior to completing the required medical exam, the conditions of the receipt were not fulfilled, meaning no insurance contract was in effect at the time of death. The insurer's only obligation is to refund the premium.
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Anahtar Kavram
Conditional Insurability Receipt