What type of coverage does a Binding Receipt provide while an application is pending?

What type of coverage does a Binding Receipt provide while an application is pending?

• A. Temporary coverage until payment is made
• B. Guaranteed coverage even if uninsurable
• C. Coverage only for a limited time
• D. Conditional coverage based on health status

Answer: (B)

A Binding Receipt is a type of insurance receipt that serves as a form of temporary coverage while a life insurance application is still pending. When an applicant receives a Binding Receipt, they are covered immediately, indicating that the insurer has agreed to provide coverage even if subsequent underwriting finds the applicant to be uninsurable, as long as the premium payment has been made. This feature differentiates it from other types of receipts, which may impose conditions or limitations based on health assessments conducted after the fact. Therefore, the core benefit of a Binding Receipt is the assurance of guaranteed coverage during the application processing stage, protecting the applicant from being denied coverage due to any potential issues that could arise later in the underwriting process.

A Binding Receipt is a type of insurance receipt that serves as a form of temporary coverage while a life insurance application is still pending. When an applicant receives a Binding Receipt, they are covered immediately, indicating that the insurer has agreed to provide coverage even if subsequent underwriting finds the applicant to be uninsurable, as long as the premium payment has been made.

This feature differentiates it from other types of receipts, which may impose conditions or limitations based on health assessments conducted after the fact. Therefore, the core benefit of a Binding Receipt is the assurance of guaranteed coverage during the application processing stage, protecting the applicant from being denied coverage due to any potential issues that could arise later in the underwriting process.