What are the stages of the formation of an insurance policy?

The stages of the formation of an insurance policy include application, underwriting, and delivery.

In the application stage, the potential insured provides necessary information to the insurance company through an application form. This information typically includes personal details, risk factors, and coverage needs.

The underwriting stage follows, where the insurer assesses the information collected in the application. Underwriting involves evaluating the risk associated with insuring the applicant and determining appropriate pricing. This step is crucial because it helps the insurer decide whether to accept or decline coverage and under what terms.

Finally, we reach the delivery stage, where the insurer issues the policy to the applicant once the underwriting process is complete. This stage confirms the agreement between the parties and outlines the coverage specifics, including the conditions and terms of the policy.

This sequence reflects the logical flow found in insurance operations, directly connecting how a policy is formally established and the responsibilities of both parties throughout the process.