Tennessee Insurance Practice Exam

What must a producer collect for same-day coverage to take effect on a non-medical insurance application?

1. A health assessment

2. A signed application and initial premium

3. A policy summary document

4. A medical examination report

The correct answer is: A signed application and initial premium

For same-day coverage to be effective on a non-medical insurance application, the producer must collect a signed application and the initial premium from the applicant. This requirement ensures that the insurance company has the necessary documentation and payment in place to activate the coverage immediately. The signed application serves as a formal agreement from the applicant and confirms the details provided, while the initial premium is the payment that secures the policy. Without both of these elements, the insurer cannot issue same-day coverage, as the payment is required to initiate the policy and the application documents the terms and conditions that both parties have agreed upon. The other options, such as a health assessment or a medical examination report, may be relevant in specific circumstances but are not essential for non-medical applications seeking immediate coverage. A policy summary document, while informative, does not play a role in the activation of coverage. Therefore, the collection of a signed application along with the initial premium is critical for facilitating same-day coverage.