Mike applied for life insurance and was issued a conditional receipt. When does his coverage become effective after he is found insurable?

The correct understanding is that the coverage under a conditional receipt becomes effective on the date the conditional receipt is issued, provided the applicant is later found to be insurable. A conditional receipt serves as temporary coverage during the underwriting process, meaning the insurance company acknowledges the receipt of the application and the premium payment, granting some level of protection to the applicant before the formal policy is issued.

If the applicant is found insurable, the coverage is backdated to the issuance of the conditional receipt. This allows the insured to have coverage in place during the time it takes for the insurance company to complete its underwriting process. Therefore, if Mike's application meets the underwriting criteria, his effective coverage date is directly tied to the issuance of the conditional receipt, reinforcing the importance of this document in enabling temporary insurance protection.