What is the primary purpose of a conditional receipt?

A conditional receipt is primarily designed to provide immediate coverage to applicants prior to the official issuance of an insurance policy. This type of receipt indicates that coverage may begin as soon as the receipt is issued, provided that the applicant meets certain conditions outlined in the receipt, such as being found insurable according to the insurer's underwriting guidelines.

Essentially, the conditional receipt gives applicants a form of reassurance that they have some level of coverage while waiting for their application to be fully processed and the policy to be issued. This provision is particularly valuable in situations where the applicant may be concerned about potential risks occurring between the date of application and the date the policy becomes effective.

The other options touch on related concepts but do not encompass the primary function of a conditional receipt. For example, guaranteeing coverage on the original application date suggests that coverage is confirmed from that date, which is not the case since conditions must still be satisfied. Similarly, serving as proof of insurability focuses more on the agent's role rather than the applicant's immediate coverage. Ensuring that a policy will be issued for the applied amount implies a certainty that the policy will be granted, which is not assured by a conditional receipt since the final decision depends on underwriting.