During a meeting on February 12th, an independent contractor finalizes an application for a whole life policy. The contractor provides a check for the first six months of coverage and is issued a conditional insurability receipt. The insurer's guidelines mandate a routine medical evaluation, which is completed on February 18th. Three days later, the contractor suffers a fatal injury. Upon reviewing the file post-mortem, the underwriter confirms the applicant met all requirements for a standard issue based on the February 18th medical results. What is the insurer's legal obligation regarding this claim?
- The insurer must pay the full death benefit because coverage became effective on the date of the completed medical examination.Cevap
- BThe insurer must pay the full death benefit because coverage became unconditionally effective on February 12th when the initial premium was accepted.
- CThe insurer will deny the claim and refund the premium because the applicant died before the home office formally approved the policy.
- DThe insurer will only refund the initial premium because the policy had not yet been physically delivered to the applicant while in good health.
Cevap
The insurer must pay the full death benefit because coverage became effective on the date of the completed medical examination.
Under a conditional insurability receipt, if an applicant pays the initial premium and is required to take a medical examination, the coverage will take effect on the date of the medical exam, provided the applicant is ultimately found to be insurable as a standard risk on that date. Because the contractor completed the exam on February 18th and was deemed a standard risk by the underwriter, the coverage was retroactively active as of February 18th. Therefore, the insurer is legally obligated to pay the death benefit for the loss occurring on February 21st.
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Anahtar Kavram
Conditional Insurability Receipts and Effective Dates