Policy delivery
Also known as: delivery of policy
Policy delivery is the step where the producer hands the issued insurance policy to the applicant, collects any outstanding premium, and obtains a statement of continued good health if required. Delivery often determines the exact date coverage begins.
Policy delivery is the final stage of the application process. After underwriting approves the risk and the insurer issues the contract, the producer physically or electronically delivers it to the applicant. Delivery is more than handing over paperwork: the producer explains the policy's provisions, ratings, and any exclusions, collects the initial premium if it was not paid with the application, and secures the applicant's signature on a delivery receipt.
What was delivered matters legally because delivery can trigger the start of coverage and the beginning of the free look period — the window, commonly 10 to 30 days depending on the state and product, during which the applicant may return the policy for a full premium refund. If the applicant did not pay a premium with the application, the producer must also obtain a statement of continued good health at delivery, confirming that nothing has changed medically since the application was signed. A material change discovered at this point can send the case back to underwriting.
Whether coverage exists before delivery depends on the receipt issued when the application was taken. A conditional receipt provides coverage as of the application or medical exam date, but only if the applicant proves to be insurable under the insurer's standard underwriting rules — if the applicant would have been declined, no coverage existed. A binding receipt (more common in property and casualty) provides immediate temporary coverage for a stated period regardless of eventual insurability. The distinction is a classic exam point: conditional coverage is contingent on insurability, binding coverage is not.
If a policy is issued other than as applied for — rated up, modified, or with a rider excluding a condition — the applicant must accept the change, often by signing an amendment at delivery. Life, health, and combined life and health licensing exams test the sequence closely, expecting you to know who signs what, when the free look begins, and how conditional and binding receipts differ.
Key takeaways
- Policy delivery is the producer's handoff of the issued policy, including explanation of provisions and collection of any unpaid premium.
- A statement of continued good health is required at delivery when no premium was collected with the application.
- Delivery commonly starts the free look period, during which the policy may be returned for a full refund.
- A conditional receipt provides coverage back to the application or exam date only if the applicant is found insurable.
- A binding receipt provides immediate temporary coverage regardless of insurability, for a stated period.