Bill the producer is collecting the initial premium on a health policy. Which statement is true?

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Multiple Choice

Bill the producer is collecting the initial premium on a health policy. Which statement is true?

Explanation:
Premium payment is the consideration that binds the contract. In health insurance, the policy doesn’t go into force until the initial premium is paid, so without that payment there is no enforceable coverage. The other statements don’t fit because coverage isn’t active without payment, premiums aren’t simply due only after issue, and initial premium refunds on cancellation aren’t automatic—they depend on unearned premium and the policy terms rather than being guaranteed.

Premium payment is the consideration that binds the contract. In health insurance, the policy doesn’t go into force until the initial premium is paid, so without that payment there is no enforceable coverage. The other statements don’t fit because coverage isn’t active without payment, premiums aren’t simply due only after issue, and initial premium refunds on cancellation aren’t automatic—they depend on unearned premium and the policy terms rather than being guaranteed.

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