What is the outcome if the proposed insured is found uninsurable after a conditional receipt is issued?

When a conditional receipt is issued, the coverage is typically effective from the date of the receipt, provided the applicant meets certain underwriting criteria. If the proposed insured is subsequently found to be uninsurable during the underwriting process, the insurance company has the right to reject the application based on the individual's specific risk factors or medical history. This means that the insurer can deny the issuance of the policy altogether since the applicant does not meet the conditions required for coverage.

In this scenario, the correct answer emphasizes the insurance company's ability to assess the risk of an applicant and determine whether to accept or decline the coverage based on the underwriting outcomes. The rights of the insurance company in this situation are crucial for maintaining the integrity of their risk assessment processes.