"We signed it – so is it active now?" For a precise answer, it helps to know four dates: the signature, the first premium, the commencement of cover, and the end of the waiting period. It is not complicated – but these are not four identical days either.
- The signature alone is not yet cover: commencement of cover starts according to the terms, typically tied to the first premium.
- Accident cover applies from the commencement of cover – and the waiting period is also counted from that date.
- Once the waiting period has passed (and after any graded years that follow), cover becomes full for every cause of death.
Date 1: the signature
Signing the offer is the start of the process: from this point, the insurer assesses the offer, and the contract comes into being according to the terms. The date of signature is therefore the legal starting point – but cover typically does not yet apply from that date. It is important to see this clearly, because in everyday language "we signed it" and "we are covered" are often blurred together.
Dates 2–3: the first premium and the commencement of cover
Commencement of cover takes effect according to the rule set out in the terms – in the market it is typically tied to the arrival of the first premium (for example, from the following day), and for some products it starts from the first day of the following month. From that date, the insurer bears the risk: cover for accidental death is typically full from this point on. It is worth pinning down this date precisely when signing – and not delaying settlement of the first premium, since the start of cover depends on it.
Date 4: the end of the waiting period
The waiting period – typically six months – is counted from the commencement of cover, and during this time the benefit for death due to illness is limited; for several products this is followed by graded first years. So the full timeline is: signature → first premium → commencement of cover (accident cover full, waiting period begins) → end of waiting period → end of any graded years → full cover for every cause of death. The details: the waiting period, in depth.
Practical takeaways
Three simple rules follow from this. It is worth settling the first premium immediately at signing – the start of cover depends on it. It is worth writing down the date of commencement of cover (in the folder): every deadline is counted from it. And: when switching between two policies – if this ever comes up – the old one should not be cancelled until the new one's waiting period has passed; this is a particularly important principle for funeral expense products, precisely because of the waiting period starting over again.
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