If an Insurance Applicant Sustains Losses After Submission of the Application

question 82

True/False

If an insurance applicant sustains losses after submission of the application but before acceptance by the insurer,the rule in most states is that the insurer must nevertheless cover the losses.

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Definitions:

Credit Sales

Sales made on credit, where the payment is received after the delivery of the goods or services.

Contra-Revenue

An account that offsets revenue accounts on the income statement, typically related to returns, allowances, and discounts.

Credit Sale

A transaction where goods or services are provided to a customer with the agreement that payment will be made at a later date.

Terms 3/10

A payment term indicating that a buyer can take a 3% discount on the invoice amount if the payment is made within 10 days of the invoice date.