Tennessee Insurance Practice Exam

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Study for the Tennessee Insurance Exam. Prepare with a database of questions and flashcards, each offering hints and detailed explanations. Ace your exam confidently!

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If an agent submits a life insurance application and the check is unsigned, when does coverage become effective if the application is approved?

The day the application is submitted
The date the agent delivers the policy and collects the initial premium
When the application is reviewed by the underwriter
The moment the application is filed

The correct answer is: The date the agent delivers the policy and collects the initial premium

The correct answer is that coverage becomes effective on the date the agent delivers the policy and collects the initial premium. In this scenario, the unsigned check indicates that the initial premium has not been paid at the time of application submission. For life insurance contracts, coverage typically does not begin until the insured pays the initial premium and the policy is delivered, assuming the application is approved. Without the premium payment, there is no binding agreement in place for coverage, even if the application is approved. Therefore, the effective date of coverage hinges on the delivery of the policy combined with the payment of the initial premium, ensuring that all necessary steps are complete before the insurance coverage takes effect.