Why is a receipt important when applying for life insurance?

A receipt is important when applying for life insurance because it offers temporary evidence of insurance until the actual policy is issued. When an applicant submits their application and premium payment, the receipt confirms that the insurer has received these items and outlines the terms under which coverage is effective. This assurance is crucial for the applicant, as it means that even before the formal policy is printed and delivered, there is coverage in place.

The temporary nature of this evidence gives the insured peace of mind, as they know they are protected during the period it takes for the insurer to process the application and issue the final policy. Without this receipt, there may be uncertainty about whether the coverage is in effect while waiting for the policy's issuance.