Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Unlike property and casualty insurance, a binder generally cannot be used to provide temporary life insurance coverage. Instead, temporary coverage during underwriting is provided by a:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
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.
Why the other options are wrong
- B) A certificate of authority is the document that licenses an insurer to transact business in a state — it has nothing to do with temporary coverage.
- C) A guaranteed insurability rider lets the owner buy more coverage later without evidence of insurability; it does not create initial temporary coverage.
- D) An endorsement modifies the policy's terms; it is not a device for providing temporary insurance pending underwriting.
Memory hook
Life uses conditional receipts, not binders. Pay the first premium and be insurable as applied for = temporary coverage begins.