What is the name of the receipt provided by an insurance company that makes a policy effective upon the first premium payment?

The receipt that makes a policy effective upon the first premium payment is known as a binding receipt. This type of receipt provides immediate coverage to the insured from the moment the first premium is paid, even before the policy is formally issued. It's an important aspect of insurance contracts because it assures the policyholder that coverage is in effect despite the fact that the policy might still be processed or finalized.

In contrast, a temporary insurance agreement typically outlines the conditions under which a policyholder may receive interim coverage, but it does not guarantee that coverage begins with the first premium payment. A policy confirmation is usually issued after the policy is issued, confirming the details of the insurance coverage, rather than establishing coverage at the point of payment. A premium receipt, while documenting the payment made, does not specifically indicate that coverage is effective immediately; it merely serves as proof of payment. Therefore, the correct choice emphasizes the immediate coverage aspect provided by a binding receipt upon the initial premium payment.