What is issued by the agent upon payment to provide immediate interim insurance?

A binding receipt is a document issued by an insurance agent upon payment of a premium that provides the applicant with immediate interim insurance coverage. This receipt confirms that the insurer's liability begins immediately or at the time of the receipt's issuance, pending the approval of the full application for the insurance policy.

The purpose of a binding receipt is to assure the applicant that they have insurance coverage during the time it takes for the insurer to review the application and assess risk. If the policy is later approved, the coverage continues; if not, the coverage was in effect only for the specified interim period noted in the binding receipt.

This contrasts with other types of receipts, like the standard receipt, which typically indicates that payment has been made but does not provide immediate coverage. An insurance certificate is usually a summary or proof of coverage that is issued for an existing policy rather than for interim coverage. An interim policy, while it may sound similar, typically refers to a temporary policy formally issued under specific circumstances, rather than a receipt that activates coverage immediately.

Overall, a binding receipt is critical in the insurance process as it offers applicants peace of mind, knowing that they have active coverage while they await final underwriting decisions.