When Y applied for insurance and paid the initial premium on August 14, his agent issued a conditional receipt. Y was killed in an automobile accident on August 22, before the policy was issued. The insurance company found nothing negative in his application and has no reason to reject the risk or classify it other than as standard. In this case, the insurance company will
Issue the policy anyway and pay the face value to the beneficiary.
The conditional receipt provides that when the applicant pays the initial premium, coverage is effective on the condition that the applicant proves to be insurable, and the policy would be issued exactly as applied for, either on the date of the application was signed or the date of the medical exam, if one is required. If the applicant dies between the date of application or medical exam, the coverage is retroactively effective, as long as the applicant was insurable.