NEWS & ARTICLES

Life insurance is an important investment for anyone – it protects your family from financial hardship in the event of your death. However, many people put off getting life insurance until later in life, when their chances of passing away are higher. If you’ve been putting off getting life insurance and are getting older, you may be wondering how long you have to have life insurance before you die in order for it to take effect. Here’s what you need to know about purchasing life insurance later in life.

How long do you have to have life insurance before you die?

The Average Waiting Period Is a Few Years

Every life insurance policy is different in terms of the waiting period before it takes effect. Some policies will have you eligible for a death benefit immediately, while others will make you wait four or five years before it takes effect. However, the average amount of time before your life insurance kicks in is one to two years. Insurance companies implement these waiting periods to prevent insurance fraud and to protect themselves financially. If you purchase an insurance policy and then pass away the next month, this means you haven’t paid any premiums on the policy, so it’s not financially viable for the insurance company to pay your benefits in this case. These rules encourage consumers to purchase life insurance earlier on for better protection.

How Can I Get an Insurance Policy With No Waiting Period?

Most insurance companies do offer policies with no waiting period, so the benefits will take effect immediately. The downside to these policies is that their monthly premiums are more expensive. However, if you are getting older, you won’t have to pay this rate for nearly as long as a younger person. In this case, the higher price is often justifiable. You’ll find term, whole, and universal life insurance policies that don’t have waiting periods, although you will likely have to shop around to find them. Working with an insurance agent can be very helpful in this scenario, as they’ll already be familiar with the providers that offer these types of policies.

There Are a Few Different Ways You Can Get an Insurance Policy With No Waiting Period. These Include:

  • Guaranteed issue or simplified issue insurance policies. A guaranteed issue policy requires no questions or health examination at all – if you can pay the premiums, you’ll get coverage. Simplified issue policies still ask a few qualifying questions, but they are not health-related, and there is no medical exam involved. However, the death benefits for these policies are much lower than other policies. They are a good option for older adults who have paid off their debts and do not have any children to support.
  • Fully underwritten policies. With these policies, you’ll undergo a health exam, and once the coverage is approved, it will be available immediately. There is a longer waiting period for these policies, but once they are put in place, the coverage immediately takes effect. If you’re in relatively good health, these policies are a good way to get coverage effective immediately.
  • Policies with an early ‘effective’ date. When purchasing any life insurance policy, you’ll need to look at the date it becomes effective. The legal language regarding these dates can be confusing at times, so be sure to ask an insurance agent if you’re unsure about it. If you pay a premium when you submit your application, the insurance will often go into effect on the date the application is approved. However, if you wait to pay a premium until after the insurance is issued, the coverage can start when you accept and sign the policy. Before committing to any insurance policy, make sure you are aware of and understand these dates to avoid future confusion while making claims.

Are There Exceptions to This Immediate Coverage?

Insurance companies usually have coverage exceptions written into their policies to prevent customers from committing insurance fraud. Here are some instances where you might not be covered, even if your policy takes effect immediately.

  • Misrepresentation on your insurance application. Even if you get away with misrepresentation now, the insurance company will likely catch it later while investigating your death. If they determine you’ve purposely misrepresented yourself in order to get better coverage, your beneficiaries likely won’t receive a payout.
  • Suicide, intentional self-harm, or homicide involving a beneficiary or someone related to them. Although these situations are not particularly common, most insurance policies have exceptions to prevent a payout if they happen.
  • Participating in criminal activity, particularly armed conflicts. This will void your insurance payout because it’s a high-risk activity that could increase your chances of death.
  • Using alcohol or drugs not prescribed by a doctor. These are risky habits that can contribute to long-term health problems.
  • Engaging in high-risk hobbies like extreme sports. Most insurance policies have exceptions for these written in, and if you participate in extreme sports you’ll need to purchase a policy with specific coverage for it.

Why Should You Buy Life Insurance Early?

Many people don’t realize the importance of purchasing life insurance until they are older, leading them to search for policies that become effective immediately. However, there are some very good reasons to purchase life insurance when you are younger, even if you don’t anticipate passing away for years to come. Here’s why it’s important to buy life insurance at a young age.

  • Although it’s not pleasant to think about, you never know when an accident could happen. End-of-life expenses are not cheap, and having a life insurance policy in place ensures that these extra costs don’t fall on your family during an already difficult time.
  • Younger adults typically don’t have much savings and are more likely to have student loan debt or mortgage debt. That means if they were to unexpectedly pass away, the amount of money their family would owe would be much greater. Life insurance provides important financial protection in this scenario.

When purchasing any insurance policy, it’s very important to understand exactly when your coverage takes effect. There are many ways to get immediate coverage if you need it.

2 Comments

  1. Rebbecca Lynn Maxwell

    I was recently diagnosed with lung cancer and I’d like to have insurance to take some of the burden of paying my final expenses

    1. Hi Rebbecca,
      You should be able to find a guaranteed issue life insurance policy for final expenses, though it won’t be cheap and the benefit amount will only cover some of the final expenses. But that’s what final expense policies are designed to do. Many of them are guaranteed issue, though each company has slightly different rules. You can start the process by filling out the form at the top of this page and you’ll be given some life insurance quotes. Otherwise you can do an internet search for “guaranteed issue final expense insurance” or speak with an independent insurance agent.

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