[C235]

conditional premium receipt

In life insurance there is usually no insurance granted until the first mode of premium is received by the company. However, the applicant may pay the first mode of premium at application or before the policy is issued. A conditional receipt is used to provide insurance should the insured die before the policy is issued. If the insured would have been otherwise insurable (but for the premature death), then the company, by the conditional receipt, would have to pay either the entire policy limit or some lesser limit as indicated on the receipt.