ACE Life Assurance Co can issue a policy to Dermot before verifying his identity, provided that which condition is met?

• A. The policy does not carry an encashment value.
• B. It verifies Dermot's identity before paying out under the policy.
• C. It verifies Dermot's identity within the statutory cooling off period allowed.
• D. It verifies that Dermot is a resident of the State.

Answer: (B)

Verifying identity is the protective step that the industry must have in place to prevent fraud and money laundering. In life insurance, an insurer can issue cover provisionally, but the payout of benefits must not proceed until the insured’s identity is confirmed. This ensures the person who will receive the proceeds is truly the rightful owner or beneficiary.

So, the correct condition is that Dermot’s identity must be verified before any payout under the policy. The other options don’t address this critical safeguard: the presence or absence of an encashment value, the cooling-off period, or residency status do not by themselves ensure that the person claiming the benefits is properly identified.