When does a life policy typically go into effect?

When does a life policy typically go into effect?

• A. Immediately upon application submission.
• B. Only after the initial premium is paid and receipt issued.
• C. After underwriting approval only.
• D. After a 30-day waiting period.

Answer: (B)

The policy goes into effect once the insurer has received the first premium and issued a receipt. The premium payment is the consideration that binds the insurance contract, and the receipt confirms the policy is in force. Submitting the application alone doesn’t create coverage, because the insurer hasn’t accepted the offer or collected payment yet. Underwriting is the process to evaluate risk, but coverage isn’t active just because it’s underwritten. A 30-day waiting period isn’t standard for the start of a policy, though some riders or special products might have delays in specific cases. So the provision begins once the initial premium is paid and a receipt is issued.

The policy goes into effect once the insurer has received the first premium and issued a receipt. The premium payment is the consideration that binds the insurance contract, and the receipt confirms the policy is in force. Submitting the application alone doesn’t create coverage, because the insurer hasn’t accepted the offer or collected payment yet. Underwriting is the process to evaluate risk, but coverage isn’t active just because it’s underwritten. A 30-day waiting period isn’t standard for the start of a policy, though some riders or special products might have delays in specific cases. So the provision begins once the initial premium is paid and a receipt is issued.