South Carolina Life Insurance Practice Exam

What must happen when an individual policy or annuity has been personally delivered to the policyowner?

1. The policyowner must sign a delivery receipt

2. The agent must collect premium payment

3. The underwriter must approve the delivery

4. A witness must sign the delivery

The correct answer is: The policyowner must sign a delivery receipt

When an individual policy or annuity is personally delivered to the policyowner, it is essential for the policyowner to sign a delivery receipt. This step serves several important functions. First, it provides documented proof that the policy or annuity has been received by the policyowner. This protects both the insurer and the policyowner by establishing a clear record of the delivery date and confirming that the policyowner acknowledges receipt of the policy's terms and conditions. Additionally, signing a delivery receipt helps to ensure that the policyholder is aware of the coverage provided and any responsibilities or requirements that accompany the policy. This can contribute to more informed decision-making related to the policy, such as understanding payment schedules and coverage details. While other actions may occur during the delivery process, such as collecting premium payments or obtaining approvals, these are not universally required for every policy delivery. The signing of a delivery receipt is a standard practice established to ensure accountability and clarity in the transaction.