The correct answer is: B. At the time of payment of claim.
An insurance company is put to the real test when it has to pay out a claim. This is because it is at this point that the company’s ability to meet its obligations is truly tested. If the company is unable to pay out a claim, it will lose the trust of its customers and may even go out of business.
The other options are not as important as the time of payment of claim. At the point of accepting proposal, the insurance company is simply assessing the risk of the potential customer. At the time of deciding sum insured, the insurance company is simply determining how much coverage to offer the customer. And at the time of announcement of bonuses, the insurance company is simply rewarding its customers for their loyalty.
However, at the time of payment of claim, the insurance company is actually putting its money where its mouth is. If the company is unable to pay out a claim, it will have to face the consequences. This is why the time of payment of claim is the real test for an insurance company.