New Jersey Life Insurance Exam Practice Question
Generally, if an application is NOT prepaid, the effective date of coverage begins on the date the
Correct Answer: D
Rationale: When an application is not prepaid, coverage typically starts when the producer delivers the policy and collects the premium. This ensures that the insurer has received the necessary payment before coverage begins.
Option A is incorrect because merely signing the application does not initiate coverage without payment. Option B is misleading; the postmark date does not guarantee coverage until the premium is paid. Option C, while significant, only indicates that the underwriter has approved the risk, but coverage is contingent upon the delivery of the policy and payment, which is why it is not the starting point for coverage.
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