When does life insurance typically go into effect according to common practice among insurers?

Life insurance typically goes into effect when the agent provides a binding receipt to the applicant. This is a common practice among insurers, signifying that the insurance coverage is effective as of the date specified on the receipt, provided that the premium has been paid and the application has met underwriting requirements. The binding receipt serves as a temporary contract, giving the applicant immediate coverage until the policy is officially issued.

In contrast, simply receiving the application or delivering the policy does not guarantee that coverage is in effect immediately. The insurance code may contain regulations regarding when coverage begins, but those are often overarching guidelines rather than specifying the moment coverage begins in a practical sense. Thus, the binding receipt is a critical step that provides assurance to the applicant until the formal policy is issued.