When does a life insurance policy typically become effective?

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When does a life insurance policy typically become effective?

a) When the policy is issued
b) When initial premium is collected and policy is issued
c) When the application is completed and signed
d) When the completed application is signed and initial premium is collected

Answer: b) When initial premium is collected and policy is issued

WA Life Insurance

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

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