What document is issued by an insurer when a life insurance policy is approved?

What document is issued by an insurer when a life insurance policy is approved?

• A. A declaration statement
• B. A certificate of insurance
• C. A notice of coverage
• D. An endorsement letter

Answer: (B)

The document issued by an insurer when a life insurance policy is approved is known as a certificate of insurance. This document serves as proof that a life insurance policy has been issued and outlines important details about the coverage, including the insured amount, the policyholder, and other benefits included in the policy. It essentially confirms that the insurance policy is active and provides essential information to the policyholder. In the context of life insurance, the certificate of insurance is significant because it serves as official documentation that the insurer acknowledges the insurability of the individual and has agreed to provide coverage after the underwriting process. This document helps the policyholder verify that their coverage is in force and outlines the terms and conditions under which benefits will be paid. The other options do not serve the same purpose as the certificate of insurance. A declaration statement typically summarizes key information about a policy but isn’t issued upon approval as a formal acknowledgment of coverage. A notice of coverage may provide preliminary information but does not serve as conclusive proof of an active policy. An endorsement letter might modify an existing policy, but it is not the initial documentation provided upon approval.

The document issued by an insurer when a life insurance policy is approved is known as a certificate of insurance. This document serves as proof that a life insurance policy has been issued and outlines important details about the coverage, including the insured amount, the policyholder, and other benefits included in the policy. It essentially confirms that the insurance policy is active and provides essential information to the policyholder.

In the context of life insurance, the certificate of insurance is significant because it serves as official documentation that the insurer acknowledges the insurability of the individual and has agreed to provide coverage after the underwriting process. This document helps the policyholder verify that their coverage is in force and outlines the terms and conditions under which benefits will be paid.

The other options do not serve the same purpose as the certificate of insurance. A declaration statement typically summarizes key information about a policy but isn’t issued upon approval as a formal acknowledgment of coverage. A notice of coverage may provide preliminary information but does not serve as conclusive proof of an active policy. An endorsement letter might modify an existing policy, but it is not the initial documentation provided upon approval.