A high school principal completes an application for a whole life insurance policy and submits the initial premium. The producer provides a conditional receipt. Two weeks later, the insurer approves the policy exactly as applied for and mails the physical contract to the producer for unconditional delivery. While the policy is sitting in the producer's office awaiting a scheduled meeting, the principal suffers a fatal heart attack. Which of the following describes the legal status of the claim?
- AThe policy is void due to lack of consideration, as the applicant never physically received the contract to finalize the agreement.
- BThe claim will be denied because the producer's express authority requires obtaining a signed delivery receipt before coverage takes effect.
- The policy is fully effective and the insurer must pay the death benefit because constructive delivery occurred when the policy was mailed to the producer.Cevap
- DThe contract is invalid because the producer failed to legally amend the delivery date on the original application before the applicant's death.
Cevap
The insurer must pay the death benefit due to the principle of constructive delivery.
The correct answer states that the policy is fully effective due to constructive delivery. Because the applicant already paid the initial premium and the insurer approved the policy as a standard risk without modifications, there were no remaining conditions for coverage. In such cases, constructive delivery legally takes place the moment the insurer relinquishes control of the policy by mailing it to the producer. Consequently, the coverage was active when the applicant died, obligating the insurer to pay the claim.
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Anahtar Kavram
Constructive Delivery