An independent contractor applies for a disability income policy but chooses not to pay the initial premium at the time of application. Three weeks later, the insurer approves the policy as a standard risk and mails the physical contract to the producer. The producer immediately calls the applicant to confirm the approval and sends the policy to the applicant's home via certified mail. Which of the following accurately describes what must occur for this policy delivery to be legally complete and coverage to take effect?
- The applicant must remit the initial premium and sign a Statement of Good Health confirming their medical condition has not changed.Cevap
- BCoverage became fully effective through constructive delivery the moment the insurer transferred the approved policy to the producer.
- CThe producer must issue a conditional receipt upon mailing the policy to ensure the applicant is protected during postal transit.
- DThe producer must unilaterally amend the application's effective date to match the postmark date before mailing the contract.
Cevap
The applicant must remit the initial premium and sign a Statement of Good Health confirming their medical condition has not changed.
When an applicant does not pay the initial premium at the time of application, the policy cannot legally go into effect until it is delivered, the premium is collected, and the applicant signs a Statement of Good Health verifying that their physical condition has not worsened since the initial underwriting process.
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Statement of Good Health and Delivery Requirements
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