Question

In forming an insurance contract, when does acceptance usually occur?

A) When an insurer delivers the policy
B) When an insurer receives receives an application
C) When an insured submits an application
D) When an insurer approves a prepaid application

Answer 1

Acceptance in an insurance contract typically happens when the insurer approves a prepaid application and issues the policy, confirming their agreement to the terms.

Step-by-step explanation:

In the context of forming an insurance contract, acceptance usually occurs when the insurer approves a prepaid application, which is option D. After the applicant has submitted an application and the required premium, the insurer begins the process of evaluating the application and the risk it presents. If the insurer decides to accept the risk and approve the application, they issue a policy, thereby signaling acceptance of the contract. The delivery of the insurance policy to the insured is also a confirmation of the acceptance, although the exact moment of acceptance might have occurred earlier when the approval was finalized internally by the insurer.