On October 3rd, a 50-year-old accountant completes an application for a $750,000 term life insurance policy, pays the initial premium in full, and is given a conditional insurability receipt by the producer. Unfortunately, the applicant dies in an auto accident on October 8th, before the insurer has completed the underwriting process. Which of the following conditions must be met for the insurer to be legally obligated to pay the full death benefit retroactively? (Select all that apply)
- The applicant must have met the insurer's standard or preferred underwriting requirements for insurability as of the date of the application or medical exam.Cevap
- Any medical examinations mandated by the insurer's underwriting rules for this policy must have been completed before the applicant's death.Cevap
- CThe insurer's home office must have officially approved the application and issued the policy prior to the applicant's death.
- DThe producer must have obtained a signed Statement of Good Health from the applicant when collecting the initial premium.
Cevap
For the insurer to be obligated to pay the death benefit under a conditional insurability receipt, the applicant must have completed any required medical examinations prior to death, and they must be found insurable as a standard or better risk under the insurer's normal underwriting guidelines.
Under a conditional insurability receipt, interim coverage becomes effective on the date of the application or the date of the required medical exam, whichever is later. For the insurer to be liable for a claim that occurs before the policy is officially issued, two primary conditions must be met: the applicant must have completed any medical exams required by the insurer's rules prior to death, and the underwriter must determine that the applicant was insurable as a standard or preferred risk as of that date.
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Conditional Insurability Receipts and Retroactive Coverage