What is an Issue Date?
An issue date, or date of issue, is the date on which an insurance company issues a specific policy. That policy becomes a contract on that date, but coverage does not necessarily activate at that point. What’s more, certain policies may include a waiting period before which the insured becomes eligible for coverage.
Issue date vs. effective date
Insureds need to distinguish between their policy’s issue date and effective date.
The issue date is the date on which your insurance provider created the policy, or the contract that you and the company agree to in order to bind coverage.
That does not necessarily mean that your coverage goes into effect on that date, though. The much more important date is the effective date, which your policy should list.
That is the date on which your coverage actually activates. In other words, if you file a claim for a covered loss on your effective date or later, your insurer is liable to cover it. But if the loss occurs before your effective date, they’re not contractually obligated to pay the claim.
Life insurance waiting periods
With life insurance, the dates can get even more complicated. That’s because certain life insurance policies — specifically, guaranteed issue life insurance — come with an extensive waiting period.
Guaranteed issue life insurance often requires a two (or more) year waiting period. In that case, there will be a significant gap between the issue date of your policy and the date your coverage for natural death kicks in.