Health · Chapter 19 · Premium Receipts
Premium Receipt
Definition
The receipt the producer must leave with an applicant who pays the initial premium with the application. The type of receipt determines precisely when and under what conditions coverage begins — before the insurer ever issues the contract. Two types are used: conditional receipts (predominant today) and binding receipts (limited use). The date on a premium receipt is always earlier than the policy's issue date.
In plain English
Proof of payment that doubles as the switch for when coverage starts.
Exam tip
Remember the consideration link: the applicant's consideration = the completed application + the first premium. No initial premium ever received → no effective policy, even if issued.
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