Montana State Life Insurance Practice Exam 2026 - Free Life Insurance Practice Questions and Study Guide

When an insurer does not accept a particular risk, it means they have decided not to issue a policy for that specific circumstance. In this context, a new policy would not be provided to the debtor because the insurer has declined to underwrite the risk. New policies are typically issued when an insurer is willing to take on the risk; however, if they are not accepting it at all, then a new policy cannot be created.

Understanding the other options clarifies why the correct response is focused on a new policy. A substitute policy describes an alternative arrangement that might be made when a risk is accepted in a different way, while a temporary insurance certificate might be issued in specific instances where coverage is pending or undergoing transition. No coverage at all suggests an absence of insurance but doesn't directly address an issued policy. Thus, the key emphasis here is that without acceptance of the risk, a new policy cannot be issued to the debtor.