CARD Q018
A conditional receipt requires insurability on the application date. The applicant pays the premium but did not qualify on that date. What does payment alone establish?
- Coverage until the premium is refunded
- Coverage until the application is declined
- Coverage at a higher premium without acceptance
- No coverage when the receipt’s condition is unmet
No coverage when the receipt’s condition is unmet
Payment does not override a conditional receipt’s insurability requirement. The receipt determines whether temporary coverage exists and its effective date.
Why each choice is right or wrong
A. Coverage until the premium is refunded
Incorrect. Payment alone does not override the unmet insurability condition.
B. Coverage until the application is declined
Incorrect. Temporary coverage is controlled by the receipt, not an automatic period until rejection.
C. Coverage at a higher premium without acceptance
Incorrect. An applicant has not automatically accepted a different higher-priced contract.
D. No coverage when the receipt’s condition is unmet
Correct. Payment does not override a conditional receipt’s insurability requirement. The receipt determines whether temporary coverage exists and its effective date.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.