A conditional binding receipt is used in life insurance. Once the agent takes the insured’s application for life insurance and the insured makes the initial payment, the agent issues a receipt that states that if the insurance company accepts the risk, the insured is insured from the date of the receipt. This matters for two reasons. One, the insured may die before the policy is issued and, assuming the company would have issued the policy, the insured’s beneficiary will receive the proceeds. Two, the contestability period begins the date of the receipt rather than after the policy is issued. (See Binder, Contestability Period).