Multiple Choice
An advantage of secondary data is that, compared to primary data, they ______.
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1. Introduction to Accounting
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When does the free look provision begin in an insurance policy?
A
On the date the policy is approved by the insurer
B
On the date the policy is delivered to the policyholder
C
On the date the application is submitted
D
On the date the first premium is paid
Verified step by step guidance1
Understand the concept of a 'free look provision' in an insurance policy. This provision allows the policyholder to review the terms and conditions of the policy and decide whether to keep it or cancel it within a specified period, typically 10-30 days.
Identify the key trigger for the free look period to begin. It is important to note that the free look provision starts when the policyholder has the opportunity to review the policy, which happens upon delivery of the policy to the policyholder.
Clarify why other options are incorrect: The date the application is submitted, the date the policy is approved by the insurer, and the date the first premium is paid do not necessarily provide the policyholder access to the policy document for review.
Relate this concept to financial accounting principles: The free look provision is similar to a trial period in contracts, where the policyholder has the right to cancel without penalties, ensuring transparency and fairness in financial agreements.
Summarize the correct answer: The free look provision begins on the date the policy is delivered to the policyholder, as this is when they can review the terms and conditions of the policy.
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