Conditional Binding Receipt

AAA

DEFINITION of 'Conditional Binding Receipt'

A receipt involved in life, health and certain property insurance contracts; if the insured is deemed to be covered by the insurer, the coverage begins on the date the insured receives the conditional binding receipt. Typically, a premium payment must be received by the insurer along with a completed acceptable application in order for the insured to obtain the receipt.

This may also be called a "conditional receipt" or a "binding receipt" depending on the type of insurance.

INVESTOPEDIA EXPLAINS 'Conditional Binding Receipt'

As long as the insured is going to receive the policy anyway, the insurer is obliged to cover a claim should one occur between the time the application is received and the time the policy is officially in place.

If however, the insured is denied coverage as the typical underwriting process progresses, the insurer could nullify the conditional binding receipt, even if a premium was collected.

RELATED TERMS
  1. Additional Death Benefit

    An amount that is paid to the beneficiary of a life insurance ...
  2. Liability

    A company's legal debts or obligations that arise during the ...
  3. Life Insurance

    A protection against the loss of income that would result if ...
  4. Underwriting

    1. The process by which investment bankers raise investment capital ...
  5. Premium

    1. The total cost of an option. 2. The difference between the ...
  6. Lloyd's Of London

    A British insurance market where members join hands as syndicates ...
Related Articles
  1. Get Sale Prices On Healthcare With Discount ...
    Insurance

    Get Sale Prices On Healthcare With Discount ...

  2. Top 10 Life Insurance Myths
    Insurance

    Top 10 Life Insurance Myths

  3. The Importance Of Property Insurance
    Home & Auto

    The Importance Of Property Insurance

  4. Services That Health Insurers Often ...
    Insurance

    Services That Health Insurers Often ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center