Willy Dye goes applies for life insurance. The agent takes Willy's application and his first premium payment, and issues Willy a conditional receipt for the payment. The next day Willy is run over by a sewage truck and killed. An autopsy shows that Willy was in excellent physical condition, and would thus have been issued an insurance policy had he lived. What will the insurer do?

Question

Quizplus · Accepted Answer

Willy was issued a conditional receipt, which means that coverage existed from the date the receipt was issued, as long as certain conditions were met (such as underwriting approval). Since Willy was in excellent physical condition, he would have been approved for the policy if he had lived. Therefore, the insurer should pay Willy's beneficiary the full death benefit.

Willy Dye Goes Applies for Life Insurance