Acceptance occurs when which of the following happens?

• A. The applicant pays the premium
• B. The applicant signs the policy
• C. The agent files the application
• D. The insurer approves the application and issues a policy

Answer: (D)

In insurance contracting, acceptance happens when the insurer agrees to insure and issues the policy. Submitting the application is the applicant making an offer, but that offer becomes a binding contract only when the insurer approves the application and issues the policy. Paying the premium or signing the policy are important steps for coverage to continue or activate, but they don’t themselves constitute acceptance. They illustrate performance under the contract, while the actual acceptance is the insurer’s approval and policy issuance that creates the binding agreement.