An applicant who pays the initial premium at the time of application is typically given what type of receipt?

An applicant who pays the initial premium at the time of application is typically issued a conditional receipt. This type of receipt indicates that the insurance company will provide coverage as long as the application is approved and no significant changes in risk occur between the time of application and the underwriting decision. The conditional receipt essentially serves as a temporary proof of insurance, ensuring that the applicant is covered while the insurer processes the application.

This practice is common in life insurance policies, allowing applicants to obtain coverage quickly while still undergoing the underwriting process. If the insurance company subsequently approves the application and determines that the applicant is insurable based on the declared risk factors, the coverage becomes effective as of the date of the conditional receipt, provided that all terms and conditions are met.

In contrast, a standard receipt does not typically imply immediate coverage, a final receipt indicates completion of the transaction after approval, and a provisional receipt is often linked to specific underwriting conditions that may not lead to immediate coverage. Thus, the conditional receipt is the appropriate document in this scenario, accurately reflecting the insurance process when an initial premium is paid at the time of application.