Is Life Insurance Coverage Effective When You Sign Up?

Although life insurance is incredibly common these days, there are plenty of grey areas when it comes to people's understanding of the way policies work. One of the most common questions we find ourselves asked is whether your life insurance coverage is effective when you put pen to paper, or if it takes some time to kick in...

Always Read Your Policy Thoroughly

In many cases, your life insurance coverage is effective when you send off your signed copy of the policy and any premium that's due with your application - however, be aware that, depending on your payment method, it could take several days for your premium to clear, and you could find yourself without coverage for that period.

More common is an "effective from" date that's listed as part of your policy - however this can sometimes be confused with the issue date or policy date, both of which are commonly found on the same documents, so it's essential you look over your policy in full to determine the date from which you're covered.

While you might not think that this will affect you, after all, you've taken out a life insurance policy with the intention of not needing it for a long time, but the truth of the matter is that issues can arise from misreading or misunderstanding the fine print in your policy document.

For example, if you accidentally misread your effective date, or confuse it with the date when your next premium is due, you might find yourself out of coverage temporarily in the future. If you're unfortunate enough to die during this period, your family won't be entitled to any pay out from your policy.

If In Doubt, Ask

Determining whether your life insurance coverage is effective when you sign up, or at a later date, is one of the most important parts of your policy. If you're unable to make sense of your policy document, don't hesitate to get in touch with the issuing insurance company to clarify your concerns. The last thing your family will need is to be left to deal with red tape or a possible non-payment when your time eventually comes.

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