Life & Health Insurance Practice Exam

If an insurer approves a policy with conditions that the applicant must meet before delivery, what type of delivery is preferred?

1. Informal delivery

2. Legal delivery

3. Conditional delivery

4. Final delivery

The correct answer is: Legal delivery

In this context, the preferred method of policy delivery is conditional delivery. When an insurer approves a policy with specific conditions that the applicant must adhere to before the policy is officially delivered, this indicates that the policy is contingent upon the fulfillment of those conditions. Conditional delivery serves to ensure that the insured meets the necessary qualifications or actions—such as providing additional information, completing a health assessment, or paying the first premium—prior to the policy activation. This method protects the insurer by ensuring that all necessary prerequisites are satisfied, thereby mitigating risks associated with issuing policies prematurely or without complete documentation. As for the other options, informal delivery typically refers to situations where the policy is handed over without following formal requirements or ensuring that all conditions have been met. Legal delivery would imply that the policy is delivered in accordance with all legal standards but does not specifically relate to conditions that must be completed beforehand. Final delivery merely signifies the last step in the delivery process and does not address the preconditions necessary for the activation of the policy. Therefore, conditional delivery is the most appropriate choice in this scenario.