Effective Date

Definition - What does Effective Date mean?

An effective date, in the context of insurance, is the specific date that an insurance policy goes into effect. Effective dates let each party involved knows when their responsibilities or benefits kick in, as insurance coverage does not necessarily begin upon application approval or policy purchase.

Insuranceopedia explains Effective Date

For example, a man purchases a health insurance policy in January, but coverage does not begin until February 1. In this case, the latter is the effective date. Before that point, the man would not be able to file a claim with his new insurer in the event of a health problem. Instead, he would have to shoulder the cost himself or rely entirely on any other health insurance policies he may have.

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