CARD Q019
The insurer issues coverage at a higher premium than requested. What must the producer do at delivery?
- Return the policy immediately without offering the changed terms
- Ask the applicant to accept the rating after coverage has begun
- Deliver the policy and collect only the premium originally quoted
- Explain the changed terms and follow acceptance and payment requirements
Explain the changed terms and follow acceptance and payment requirements
A changed offer must be explained accurately. Coverage effectiveness depends on the policy, receipt, and required acceptance conditions.
Why each choice is right or wrong
A. Return the policy immediately without offering the changed terms
Incorrect. The applicant can consider the changed offer; immediate return without explanation is not the required response.
B. Ask the applicant to accept the rating after coverage has begun
Incorrect. Acceptance and effective-date conditions must be satisfied rather than assumed after coverage begins.
C. Deliver the policy and collect only the premium originally quoted
Incorrect. Collecting the original amount alone may leave the changed offer unaccepted or underfunded.
D. Explain the changed terms and follow acceptance and payment requirements
Correct. A changed offer must be explained accurately. Coverage effectiveness depends on the policy, receipt, and required acceptance conditions.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.