Rhode Island Life Insurance Practice Exam

Which of the following actions does NOT constitute policy delivery?

1. Policy delivery with a signed application

2. Policy issued with a rating

3. Policy delivered with initial premium check

4. Immediate delivery upon policy approval

The correct answer is: Policy issued with a rating

The action that does not constitute policy delivery is when a policy is issued with a rating. Policy delivery typically involves the transfer of the insurance policy to the insured party while ensuring that all conditions are met, including the payment of the initial premium if required. Delivery with a signed application or upon payment of the initial premium represents the formal acceptance of the contract by the insured, effectively allowing coverage to begin. Immediate delivery upon policy approval shows readiness to start the coverage as soon as it is underwritten and approved by the insurer. However, when a policy is issued with a rating, it usually means that the policy might have an additional charge due to underwriting considerations or adjustments. This means that the policy may not have been fully executed or accepted, as it carries additional conditions that could affect the terms under which the insured would accept the policy. Until those ratings and conditions are fully clarified and accepted, it does not meet the complete criteria for policy delivery.