Question

On April 9, an application is submitted without the initial premium. The insurer requires a medical exam, and it is completed on April 14. On April 18, the insurer issued the policy, and the producer delivers it on April 21. When is coverage effective?

A. April 9
B. April 14
C. April 18
D. April 21

Answer 1

Coverage for an insurance policy typically begins once the initial premium is received and the policy is issued, not necessarily on the application or medical exam date. Assuming the premium was paid by the policy issue date, the coverage would be effective on April 18, when the policy was issued.

Step-by-step explanation:

When determining when coverage is effective for an insurance policy, it is essential to consider the insurer's policies regarding policy issuance and premium payment. In the scenario provided, on April 9, an application is submitted without the initial premium. Coverage typically does not begin until the initial premium is received and the policy is issued. Although a medical exam was completed on April 14, and the policy was issued on April 18, the coverage usually starts on the date specified in the policy, which could be the issue date or the date the premium is received. Since the question does not specify when the premium was paid, the safe assumption is that the policy takes effect upon issuance; therefore, the correct answer would be C. April 18, the date on which the insurer issued the policy.