How Long Do You Need to Have Life Insurance Before Death?



A common question that we get in our high-risk life insurance agency is how long do you have to have life insurance before death?

Death claims may seem like life insurance 101 to experienced agents, but many clients are justifiably concerned.

How long do you have to have life insurance before death? Your life insurance is once you accept the offer and pay the first month’s premium. There is a 2-year contestability period to investigate claims, and some policies have modified death benefits in the beginning years that may pay a reduced death benefit.  

Review your life insurance policy with your agent to be certain your policy doesn’t have a waiting period or exclusion.

The good news is that most life insurance policies are level coverage where you’re insured fully from the first day of the policy.

Most of the best life insurance companies in the United States pay the full death benefit from day one.

Getting first-day coverage is affordable as well.

Use our free rate comparison tool to view the rates of highly-rated life insurance companies across the nation.

Our article will discuss the application process, so you know how long you need to have your life insurance before you die.

Feel free to skip ahead if you like.

When Does My Life Insurance Coverage Begin?

Life insurance in it’s simplest form is a legal contract where the life insurance company agrees to pay a death benefit when you die.

What binds the coverage is the exchange of value between you and the life insurance company.

This exchange is usually the payment of premiums for the life insurance company’s promise to pay the death benefit.

However, once you accept your offer, pay your first month’s premium, and the life insurance company process the final paperwork, you’re “in force” or covered.

If you die when the life insurance policy is in force, the life insurance company is obligated to pay covered death claims, whether it’s in the first month or the 300th month.

However, if your policy has a modified death benefit, you may not get the full death benefit in the early years of your life insurance policy.

Modified death benefits are usually offered in guaranteed issue life insurance, which has no medical questions or underwriting.

These modified death benefits usually will return the premiums paid to your beneficiary plus interest when you die, so you’re not losing any money.

In some cases, accidental deaths may be exempted from the modified death benefit period and pay in full from day one of the life insurance policy.

Are You Covered if You Die in Underwriting?

If you are purchasing no-exam life insurance that gives an instant decision, you should be covered quickly, sometimes instantly.

However, what if you apply for traditional life insurance with full medical underwriting?

The traditional underwriting of a life insurance policy can take weeks and in some cases, months.

That is a long time to go without coverage.

In fact, I had a client die before we were able to complete the application suddenly and unexpectedly.

To benefit your loved ones, life insurance companies offer something called temporary insurance.

Temporary insurance or a limited insurance agreement will cover your death while the life insurance company is underwriting your application as long as you would have been approved.

Each life insurance company has slightly different rules regarding temporary life insurance coverage.

Usually, you need to provide financial consideration or first month’s premium and complete all the underwriting requirements, such as the medical exam.

Sometimes clients are hesitant to complete the temporary insurance agreement.

They don’t want to be “locked-in” if they change their mind.

However, there is no downside to buying temporary insurance.

If you’re approved, the premium is applied toward your first month’s premium.

If you declined the coverage or change your mind, the life insurance company will refund your premiums to you.

Can the Life Insurance Company not Pay?

There are some instances when a life insurance company won’t pay.

If you die within the first two years of the policy’s coverage, the life insurance company can invoke what’s known as the contestability clause.

Essentially the life insurance company can investigate your death claim to be sure that you weren’t misrepresenting your health to the life insurance company.

For example, if told the life insurance company that you were healthy, but knew you had terminal cancer and never disclosed it.

As a result, it is important for you to be truthful on your application if you want life insurance with a pre-existing condition.

If you misrepresent your health and the life insurance company discovers it during the contestability period, they can deny your death claims on the grounds of your misrepresentation.

However, there are some misrepresentations that will go even beyond the contestability period.

For example, if you conspired with your doctor to falsify your medical records in order to get life insurance.

Another instance when a life insurance policy wouldn’t pay is if there are certain death exclusions in the policy language.

For example, life insurance may not cover a plane crash if you purchased a policy with a private aviation exclusion rider.

Again the above scenarios are rare, but you want to fully understand the coverage that you’re buying and any exclusions it may have.

Final Thoughts

You don’t need to have life insurance for very long before you die in many cases for the life insurance policy to pay the death benefit.

In some cases, the life insurance company may pay your death benefits while you’re in underwriting if you purchased the temporary insurance agreement during the application.

During the contestability period of your life insurance policy, the life insurance company can investigate the death claim for misrepresentations.

If your worried your policy will be investigated, don’t panic.

The life insurance company is not looking to deny justified claims; they are protecting their solvency against fraud.

If you’re interested in life insurance coverage, make sure you check out the rates of the top companies with our free rate tool.

Our free rate comparison tool will take all the shopping off your plate by displaying the rates of over 25 highly-rated life insurance companies.

Thank you for reading our article on how long you have to have life insurance before death.

If you want to go over a specific situation, please contact us.