In Smith v. Westland Life Ins. Co. (1975) 15 Cal.3d 111, Smith applied to Westland for life insurance and contemporaneously paid the first month's premium. The conditional receipt Westland gave Smith for the premium payment provided that "if the applicant paid the premium at the time he applied for insurance, coverage would take effect as of the date of the application or the date of medical examination, whichever was later, provided the company determined that he was entitled to the insurance on the plan requested." ( Id. at pp. 116-117.) In Smith, the Supreme Court observed: "In Ransom v. Penn Mutual Life Ins. Co. (1954). . ., we held that such a provision in an insurance application 'gives rise to a contract of insurance immediately upon receipt of the application and payment of the premium, and that the proviso that the company shall be satisfied that the insured was acceptable at the date of the application creates only a right to terminate the contract if the company becomes dissatisfied with the risk before a policy is issued.'" ( Id. at p. 117.) In Smith v. Westland Life Ins. Co., supra, 15 Cal.3d 111, the Supreme Court stated: "In Ransom we recognized that an ordinary person who pays the premium at the time he applies for insurance is justified in assuming that payment will bring immediate protection, regardless of whether or not the insurer ultimately decides to accept the risk. (43 Cal.2d at p. 425.)