Conditional Receipt

Retroactively to the application date, if the applicant is ultimately found insurable as applied for — A conditional receipt provides coverage retroactive to the date of application if the applicant meets the insurer's insurability standards as applied for. The insurer must approve the application on the basis stated in the application; if it does, coverage relates back to the application date, so a death occurring between application and policy delivery is covered. If the applicant is not insurable at standard rates, the receipt does not bind the insurer. This retroactive protection is the essence of the conditional receipt and encourages prompt premium collection with the application.

National insurance concept

Conditional receipt — In life insurance the standard device for temporary coverage is the conditional receipt: coverage begins when the applicant pays the first premium and satisfies the stated conditions — typically that the applicant was insurable as applied for on the date of application. Binders are a property/casualty mechanism and are not used for life or disability coverage. If the applicant is later found to have been uninsurable, the receipt is void and the premium is returned.

National insurance concept