Definitions for "Binding Receipt"
A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the company to make the policy effective from the date of the receipt.
Once the initial payment has been made and while the pending life and health application for insurance is being investigated and either issued or rejected, a binding receipt is issued to verify receipt of payment and offer temporary coverage until final decision is made.
In insurance, a premium receipt which makes insurance coverage effective immediately but only until the insurance company either rejects the application or approves it and issues the policy.