What does the term “policy delivery” refer to in insurance practices?

The term “policy delivery” in insurance practices specifically refers to the act of providing the policy to the applicant once it has been approved. This step is crucial as it signifies the official start of the insurance contract between the insurer and the insured. During policy delivery, the insurer hands over the completed policy document to the policyholder, ensuring that they have all the necessary documentation to acknowledge their coverage. This is the moment when the contract becomes effective, and the policyholder is bound by the terms outlined in the policy.

While the other options touch on important aspects of the insurance process, they do not accurately define “policy delivery.” Explaining policy features and collecting final payments are vital in the overall customer experience but occur either before or during the delivery phase, rather than being synonymous with it. Filing the application with the state is a regulatory step in the insurance process that happens prior to policy issuance and delivery. Thus, the essence of "policy delivery" resides in the transfer of the policy document itself to the insured following underwriting approval.