What is the life insurance effective date?

Your life insurance policy’s effective date is the start of your term and billing period. Most often, it’s when your coverage will become active, but it depends on the insurer.

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Nupur GambhirSenior Editor & Licensed Life Insurance ExpertNupur Gambhir is a licensed life, health, and disability insurance expert and a former senior editor at Policygenius. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service Cake.&Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is a life insurance and annuities editor, licensed life insurance agent, and former sales associate at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

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Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.
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Ian Bloom, CFP®, RLP®Ian Bloom, CFP®, RLP®Certified Financial PlannerIan Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

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The effective date is the day your life insurance coverage becomes active. For example, if your policy lists January 1, 2023 as the effective date, it means that if you pass away on or after that date, your insurer will pay the death benefit to your listed beneficiaries.

Key takeaways

  • Life insurance coverage is only officially active on and after the effective date. You don’t have coverage right when you apply, before the effective date.

  • You can get temporary life insurance coverage to protect yourself before your policy’s effective date.

  • If you need to replace an expiring life insurance policy, start at least six months early to avoid a coverage gap.

When does a life insurance policy becomes effective?

A life insurance policy typically becomes effective once your application has been approved, you’ve signed your policy and made your first premium payment.

While it doesn’t take long to apply for life insurance online, it can take five to six weeks to go through underwriting — which is the process insurers use to evaluate your application. After underwriting, you’ll get a final policy decision and have an active life insurance policy.

→ Learn more about how life insurance underwriting works

How do you find the effective date of a policy?

Your life insurance effective date can be found in your policy statement and the online portal for your insurance policy. The actual effective date varies for each policy because it’s the day that you sign your policy papers and pay your first premium.

If your life insurance company handles all policy documentation by mail, it will mail you a new policy document that includes the effective date.

Getting coverage before your effective date

Because there are multiple steps to the life insurance application process, there’s a gap between when you start your application and when your coverage actually kicks in.

If you die during that time — also known as a coverage gap — then your family won’t receive the death benefit. Adding temporary coverage to your policy is one way to avoid going without coverage.

Temporary life insurance coverage

Temporary coverage lasts from the time you either sign your application (or take your medical exam, depending on the insurer) until your effective date. Most insurance companies give you the option to add temporary coverage on your application.

A temporary life insurance policy offers anywhere from $50,000 to $1 million in coverage — maximum amounts vary for each insurer — and ensures your loved ones get some financial support if you pass away before your application is approved.

The cost of temporary coverage is based on the quote you receive when you initially apply for life insurance.

Can an age change impact the effective date?

An age change is another scenario where your coverage technically starts before your effective date. If you pass your birthday or half-birthday during the underwriting process, you may have the option to backdate your life insurance policy by paying an extra monthly premium.

This way, your effective date will begin at the age you were when you applied, as opposed to your current age. Since life insurance premiums increase as you get older, some people choose to pay an extra premium upfront in order to get lowest rate for the rest of their term.

In this scenario, you’re technically paying for time without coverage in order to lock in the lowest rate. Not all life insurance companies allow this, but the insurance agent you’re working with will be able to help you if your age change affects your policy.

Ready to shop for life insurance?

What is the life insurance issue date?

Your policy’s issue date is the day that your policy is approved and your insurer offers you coverage. At this point you can choose to accept or reject the policy, but you don’t have coverage yet.

If you die between the issue date and the effective date, your beneficiary won’t receive the death benefit.

The time in between the issue date and effective date can vary, depending on whether you sign the policy immediately or you choose to wait. The amount of time you have to accept or reject the policy depends on the insurance company and your health classification.

People with just one or two minor health conditions may have up to a few months to accept the policy, while people who have more complex health concerns and higher insurance risk may only have 30 days.

→ Learn more about life insurance classifications

How to keep your life insurance policy active

For your life insurance policy to remain active, or in force, you’ll need to continue to make premium payments on time.

There are a few rare caveats, mostly in instances of fraud.. For example, if you lie on your life insurance application and the insurer finds out, it can cancel your policy and invalidate your coverage.

What happens when your policy expires?

You’ll lose your insurance coverage when your policy expires. In other words, if you die after your policy has expired, your family won’t receive a death benefit. Your policy’s expiration date is usually called the term date.

If you still have any financial obligations or dependents on your term date, you’ll need to either renew your existing policy, purchase a new policy to retain coverage, or convert your term life policy into a permanent life insurance policy.

How to shop for a new policy

To avoid a coverage gap, start the application process for a new policy six months before your policy’s expiration date.

This entails repeating the original process over again — you’ll fill out a health questionnaire or take a medical exam, and the insurance company will review your application details over several weeks. Your rates and eligibility for certain policies will likely be different the second time around due to age and health, depending on how long ago you purchased your previous policy.

Your life insurance policy’s effective date is an important detail in your family’s financial plan. If you don’t have an existing policy, ask your life insurance agent about temporary coverage to ensure your loved ones are protected before your policy becomes active.

More about understanding your life insurance policy

Authors

Nupur Gambhir is a licensed life, health, and disability insurance expert and a former senior editor at Policygenius. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service Cake.

Katherine Murbach is a life insurance and annuities editor, licensed life insurance agent, and former sales associate at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Editor

Antonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Ian Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

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