What is the difference between a conditional premium receipt and a binding premium receipt?

A binding premium receipt guarantees that coverage is in effect from the date of the receipt, regardless of the status of the applicant's insurability. This means that even if the insurance company later finds that the applicant is not insurable, coverage will still apply as per the terms outlined in the binding receipt. The binding nature ensures that the insurer cannot back out of providing coverage as long as the premium is paid.

In contrast, a conditional premium receipt only provides coverage if the applicant is found to be insurable at the time of the underwriting decision. Until that determination is made, the coverage is not guaranteed from the date of the receipt. This is a significant distinction that makes the binding receipt a much stronger form of coverage for the applicant.

Thus, option C accurately reflects the nature of the binding premium receipt, which always provides insurance effective from the date it is issued, contingent upon payment of the premium, making it distinct from a conditional premium receipt.