Conditional or binding receipts are primarily associated with which type of insurance?

Conditional or binding receipts are primarily associated with life and health insurance because they serve as a form of temporary coverage for applicants during the underwriting process. When an applicant pays for insurance at the time of application, they receive a conditional receipt that provides limited coverage, often contingent upon the insurer's acceptance of the application. This means that if the applicant were to die or suffer a covered event before the policy is officially issued, the insurer would still provide a payment, subject to certain conditions being met.

In the realm of life and health insurance, this mechanism is crucial as it reassures applicants that they have some level of protection while waiting for the insurer's underwriting decision. Other types of insurance, such as property and casualty or auto insurance, may have different protocols and generally do not utilize conditional receipts in the same way, as they typically require immediate coverage upon payment or issuance of policy documents.