State RegulationsPA specificDifficulty 2/5
A life policy was issued with a requirement that the insured furnish a statement of good health at delivery. Between application and delivery, the insured developed a serious illness. What should the producer do under Pennsylvania delivery rules?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Pennsylvania delivery rules, including 40 P.S. § 625.4, a policy issued with conditions — such as a statement of good health at delivery — does not take effect until delivery occurs and the conditions are satisfied. The insured's intervening illness means the statement cannot truthfully be given, so the producer must hold delivery and let the insurer reconsider the risk. Delivering anyway would put coverage in force that the insurer never actually approved on the true facts.
Why the other options are wrong
- B) Issue-date approval does not override a delivery condition; the health change defeats the condition and stops effective coverage.
- C) Suppressing delivery documentation compounds the problem and leaves the transaction without a lawful effective date.
- D) A personal waiver by the insured cannot substitute for the insurer's condition; only the insurer can accept the changed risk.
Memory hook
Sick at delivery? Don't deliver — conditions first, coverage second.