South Carolina Life Insurance Practice Exam

What type of life insurance policy issues certificates of insurance to the insureds?

1. Whole Life Policy

2. Term Life Policy

3. Evidence of insurability

4. Universal Life Policy

The correct answer is: Evidence of insurability

The correct choice regarding what type of life insurance policy issues certificates of insurance to the insureds is associated with evidence of insurability. In the context of life insurance, a certificate of insurance is typically issued when an individual is part of a group insurance plan. This document serves as proof of coverage for the insured, confirming their membership in a group policy. Evidence of insurability generally relates to scenarios where individuals are required to provide personal health information to qualify for coverage, particularly in group insurance. It allows insurers to assess the risk of insuring an individual and subsequently grants them insurance coverage backed by a certificate. This is distinct from individual policies like whole life, term life, or universal life, which typically do not issue certificates of insurance; instead, they provide individual contracts directly to policyholders which outline the terms, conditions, and benefits. Therefore, the choice of evidence of insurability accurately encapsulates the concept of issuing certificates of insurance as it pertains to group insurance contexts where these documents serve as a form of verification of coverage for the insureds involved.