When does the coverage for a life insurance policy become effective if the initial premium is not paid at the time of application?

The coverage for a life insurance policy becomes effective upon receipt of the policy and payment of the premium. This process is standard in most insurance practices, as it ensures that there is a financial commitment from the policyholder before the coverage kicks in. The timing of payment is crucial; if the initial premium is not paid at the time of application, the insurance company does not consider the policy active.

When the applicant receives the policy documents, that indicates approval from the insurer, but actual coverage only starts once the premium is also paid. This practice protects the insurer from assuming risk on a policy that hasn’t been financially secured by the applicant. Therefore, simply receiving the policy or having the application approved does not activate the coverage without the premium payment.