A veterinarian applies for an individual life insurance policy on May 4th, opting to submit the initial premium only when the policy is delivered. The underwriting department approves the application as a standard risk and issues the policy on May 19th. The agent arranges to meet the client on May 24th to finalize the transaction. However, on May 21st, the veterinarian suffers a severe stroke and is admitted to the intensive care unit. Which of the following describes the legal status of the coverage and the agent's responsibilities on May 24th?
- ACoverage automatically activated when the policy was issued on May 19th, meaning the agent only needs to collect the initial premium.
- BThe insurer fulfilled its consideration by approving the application, so the agent must deliver the policy regardless of the client's current medical status.
- No insurance contract is in force, and the agent must halt the delivery process because the applicant cannot truthfully validate their continued good health.Cevap
- DThe agent has the apparent authority to waive the final health verification requirement because the underwriter already classified the client as a standard risk.
Cevap
The agent must halt the delivery process because no insurance contract is in force, as the applicant cannot validate their continued good health.
In cases where the initial premium is not submitted with the application, coverage does not automatically begin upon policy issue. The insurance contract only goes into effect when the policy is delivered, the initial premium is collected, and the applicant signs a Statement of Good Health. Because the applicant's health drastically changed prior to delivery, this statement cannot be signed, and the agent is legally barred from completing the transaction.
Adım Adım Çözüm
Anahtar Kavram
Effective Date and Statement of Good Health Requirements