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The Curious Bag
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Applicants may receive a conditional receipt for life insurance from an insurer. This temporary agreement between the insurance company and applicant is effective during the application process.
What is a Conditional Life Receipt
A conditional receipt for life insurance provides temporary protection for the applicant while his application is reviewed. The insurer will then decide whether to extend or refuse the policy.
Considerations
In order to receive a conditional receipt for life insurance, an applicant must submit a completed application accompanied with a payment for the full initial premium.
Benefits
If the applicant who receives the conditional receipt dies before a policy is issued, the insurer may still pay the death benefit.
Policy Date
The issuance of a conditional receipt will allow the insurer to date the policy when the initial premium was paid or when the underwriting requirements are satisfied; not when the application was approved.
Warning
An insurer may refuse to pay the death benefit of an applicant who has a conditional receipt if it is determined that it wouldn't have extended coverage after reviewing the application.
Source:
Total Return Annuities: Definition of "Conditional Receipt"
All Business: Conditional Receipt
More Information:
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