Life · Chapter 7 · Receipts & Effective Date
Binding (Unconditional) Receipt
Definition
Coverage begins immediately upon premium payment and is GUARANTEED until the insurer formally rejects the application — even if the applicant turns out to be uninsurable. Rare in life insurance (more common in property & casualty); often reserved for experienced agents; capped at a stated maximum.
Exam tip
Conditional = pays only if you WOULD have qualified. Binding = pays until formally rejected, qualified or not.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms