Life insurance is a contract between two parties. Both parties must agree to the terms of the contract. The life insurance company has pre-qualifying requirements that the prospective policy owner must satisfy before determining an underwriting offer. After the underwriting offer is presented and accepted by the prospective policy owner and premium is paid, a binding contract has been created.
Many life insurance companies offer temporary coverage with a binding premium deposit, but limited to the terms and conditions of each company.
If you are asking if life insurance is effective immediately after filling out the application, the answer is usually no. Unless you paid ahead of time, the policy must be approved, issued and the first premium and all delivery paperwork returned for it to go into effect. This process can take from hours (with some no exam plans) to months.
If you are asking if life insurance is effective immediately after satisfying those requirements, the answer is "maybe". if death occurred while the check and signed delivery paperwork are in the mail, it is a legal issue whether the life insurance company would pay the benefit. Legally, the effective date is the date the policy is actually in effect, and this is after the check and delivery requirements have been processed by the insurance company.
Insurance Advisor, Lordship Insurance Services, California
It will depend. Some Insurance companies offer conditional receipts which will extend coverage in the event of death before the policy is delivered. The application must be free from deception and the insurance company must have been predetermined to provide coverage provided the application was accurate. Some policies are not effective until the actual underwriting process has been completed.
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Many life insurance companies offer temporary coverage with a binding premium deposit, but limited to the terms and conditions of each company.
If you are asking if life insurance is effective immediately after satisfying those requirements, the answer is "maybe". if death occurred while the check and signed delivery paperwork are in the mail, it is a legal issue whether the life insurance company would pay the benefit. Legally, the effective date is the date the policy is actually in effect, and this is after the check and delivery requirements have been processed by the insurance company.