Question

Edward applies for a disability insurance policy. He pays the initial premium at the time of application and receives a conditional receipt. Three days after the insurance company conducts a medical examination, but before it issues a policy, Edward suffers a stroke. Upon reviewing the results of his medical exam, the company discovers that Edward has been diagnosed with high blood pressure and atherosclerosis. Under the terms of the conditional receipt, the insurance company:

Answer 1

The anwer is: Denies the claim because the insurer would not have issued the policy as applied for as standard or better.

Step-by-step explanation:

The insurer will deny the claim, and will also deny the application, issue a rated policy, or issue a standard policy for which excludes all claims related to blood pressuer and/or the condition of Edward's arteries.