May 13, 2021

Why You Need Day 1 Coverage From Your Life Insurance Policy

No one enjoys talking about their death, especially on how it will affect their loved ones. While talking about life insurance is a conversation related to your death, the conversation can lead to a plan to help your loved ones in the future. You want to be covered immediately when you sign the life insurance documents and go back to your day. Did you know that your policy has an effective date in the future that won’t cover your death if it happens between now and then?

What’s the Policy Effective Date?

An effective date indicates a start date for a new life insurance policy or the first day that you’ll be covered in the unfortunate case of your death. Your death benefit will be paid to your beneficiaries as long as you don’t pass away until the effective date. Since no one knows their fate and could suffer an unexpected fate on any day, you want to be covered on day 1, the day you sign the life insurance policy documents, and make your first premium payment.

Isn’t the Policy Signing Date When My Coverage Starts?

Life insurance policies go through a process called underwriting. It’s the decision-making process on your approval and on what rates you pay which depends on how the underwriters classify you healthwise. The process can be quick or can take weeks to complete.

For underwriting, you may be required to go through a medical exam to find out if you have any chronic or serious health conditions. Your health status affects your rates and approval. From the day you apply to the day you’re approved and receive your policy, four to six weeks can go by. You’re not covered by the life insurance policy during that time. If you die, your family receives nothing.

Don’t Be Fooled by the Issue Date

On the date your policy is issued, it has an issue date. The actual policy documentation, however, may have a different effective date. This means that although the policy has been approved, you’re not covered until the effective date. You can have the policy in hand, accepted by you, with an effective date of a few weeks or months from now, and, would something happen to you in the interim, your family wouldn’t be eligible to receive the policy payoff.

How Can I Get Day 1 Life Insurance Coverage?

There’s good news about getting day 1 life insurance coverage. Insurance companies offer temporary coverage that provides a benefit of up to $100,000 to guarantee that your loved ones receive a financial benefit if you pass on prior to your regular policy effective date. You can ask for a quote on temporary coverage when you apply online for life insurance. Make it clear what you want and on what date you want the temporary policy to become in effect.

There are also insurance companies that actually provide coverage from Day 1, regardless of your health or policy. These are the best policies that you can get!

What If I Just Replace My Term Policy Coverage?

With a term policy, you have an expiration date. When the policy expires, you aren’t covered. You don’t want to be without coverage so you’re back to needing coverage on the same day that one policy lapses and another replaces it. It’s possible with careful advance planning.

Whether you’re converting your term policy to a permanent one or purchasing a brand-new policy to replace the old one, start the process six months in advance. You may have to go through a full underwriting period again, complete with medical examinations and interviews. Contact your insurance agent and explain your dilemma, making it clear that you want no lapse in coverage. Starting early allows you to shop around, consider policy options, and make the best decision on your life insurance and when you need it to begin.

The process of finding and securing Day 1 coverage isn’t easy. It becomes even harder as a diabetic. At Diabetic Direct, we aim to make it simple and easy.

If you are interested in learning more about day 1 life insurance policies or signing up for one, click here to learn more about Diabetic Direct and get coverage in as little as 10 minutes.

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