Sarah meets with her insurance agent on Tuesday to finalize her life insurance application. She writes a check for the first premium and receives a conditional receipt. Sadly, Sarah suffers a fatal heart attack on Thursday before the insurer completes the final underwriting process. The home office underwriters later confirm that Sarah was a standard risk on the day she applied.
Based on these facts, how will the insurance company handle this claim?
- The company will pay the full death benefit because she was insurable as a standard risk on the application date.Cevap
- BThe company will return the premium to her estate because the policy had not been formally approved and issued prior to her death.
- CThe company will deny the claim because Sarah was not alive to sign a Statement of Good Health upon policy delivery.
- DThe company will pay the death benefit only if the agent possessed the express authority to bind coverage immediately.
Cevap
The company will pay the full death benefit because she was insurable as a standard risk on the application date.
When a conditional receipt is issued after collecting the initial premium, coverage becomes effective on the date of the application (or medical exam, if required) provided the applicant is later found to be insurable as a standard risk. Because Sarah was determined to be insurable on the application date, the coverage was in force when she died two days later, and the insurer must pay the death benefit.
Adım Adım Çözüm
Anahtar Kavram
Conditional Receipt Effective Date