Marcus, a freelance graphic designer, completes a life insurance application and gives his producer a check for the initial premium. The producer provides a conditional receipt in return. No medical exam is required for this policy. Two days later, before the home office can process the application, Marcus dies in a sudden accident. The underwriting department later confirms he would have been approved as a standard risk on the application date. What action must the insurance company take?
- ADeny the claim because the insurance contract lacked consideration from the insurer at the time of death
- BReturn the premium check to his estate without paying the death benefit
- Pay the full death benefit to his beneficiaryCevap
- DPay the claim only if the producer had expressly bound the coverage in writing
Cevap
Pay the full death benefit to his beneficiary
When an initial premium is paid with the application and a conditional receipt is issued, coverage becomes effective on the date of the application (or the medical exam, whichever is later) as long as the applicant is found to be insurable as a standard risk. Since Marcus was insurable on the application date, the coverage was retroactively in force at the time of his death.
Adım Adım Çözüm
Anahtar Kavram
Conditional Receipts and Effective Date of Coverage