Questions: K applies for a life insurance policy on herself and submits the initial premium with the application. She receives a receipt stating that coverage begins immediately if the application is approved. What kind of receipt was used? A. Initial Premium B. Binding C. Conditional D. Contingent

K applies for a life insurance policy on herself and submits the initial premium with the application. She receives a receipt stating that coverage begins immediately if the application is approved. What kind of receipt was used?
A. Initial Premium
B. Binding
C. Conditional
D. Contingent

Transcript text: K applies for a life insurance policy on herself and submits the initial premium with the application. She receives a receipt stating that coverage begins immediately if the application is approved. What kind of receipt was used? A. Initial Premium B. Binding C. Conditional D. Contingent

Solution

Solution Steps

Step 1: Analyze the question

The question asks what type of receipt provides immediate coverage upon application approval if the initial premium is submitted with the application.

Step 2: Evaluate receipt types

Binding Receipt: Guarantees coverage from the time of application and premium payment, regardless of approval.
Conditional Receipt: Provides coverage starting on the application date _if_ the application is approved.
Contingent Receipt: Only provides interim coverage if certain additional conditions are met before the policy is issued.

Final Answer C. Conditional

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