Life · Chapter 7 · Receipts & Effective Date
Conditional Receipt
Definition
Given when the premium is paid WITH the application. Coverage is effective as of the application date or medical-exam date (whichever is LATER) — ON THE CONDITION the applicant proves insurable at standard/preferred rates. If found uninsurable, there was never any coverage and the premium is refunded.
Example
Applicant dies before approval → the insurer still underwrites as if alive. Insurable as applied for → claim PAID retroactively. Not insurable → claim denied, premium refunded.
Exam tip
The most common receipt in life & health. Expect 2–4 exam questions on conditional vs binding.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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