How Long Do You Have to Have Life Insurance Before You Die?

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insu…

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Reviewed by

Rachael Brennan

Licensed Insurance Agent

UPDATED: Dec 18, 2021

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Here's the Scoop

  • Most life insurance plans have a waiting period of around two years before your beneficiaries will receive a payout after you die
  • For people worried about dying soon after getting a policy, there are options like Guaranteed Issue Life Insurance that go into effect immediately
  • Even if you die after the waiting period, your life insurance might deny your death benefit if you’ve violated the terms of your policy

Life insurance is one of the best ways to provide for your loved ones financially after you pass away. A life insurance payout to your beneficiary (or beneficiaries) helps them pay for your end-of-life medical bills and funeral, as well as mortgage payments, college expenses, or whatever else they might need.

But what happens if you buy insurance too late? Whether you decide on term life or whole life, most policies have a waiting period after they become active. However, the exact length of the waiting period is specific to your policy.

So, how long do you have to have life insurance before you die? If you’re concerned about a waiting period, you should start your search by seeing what quotes might look like for you by entering your ZIP code into our free tool.

Table of Contents

How long do you have to have life insurance before you die?

When you buy a life insurance policy, you might assume that your beneficiaries will be paid when your application has been approved, and the plan is active. However, that’s usually not true.

Life insurance companies enforce a waiting period so they can avoid fraud and protect themselves financially. After all, it’s not economically viable for the company to pay your beneficiaries if you never made a payment.

The average waiting period for life insurance is two years, though some plans use a four- or five-year period. Some plans don’t have a waiting period; but those are usually more expensive.

While there are options for insurance that go into effect immediately, the cheapest option is to get insurance before you need it. You’ll get more affordable rates the younger you are, and you’ll probably be safe through the waiting period.

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What happens if you die during the waiting period?

It depends on your policy, but if you die during the waiting period, your beneficiaries will likely be eligible to claim money you’ve already spent and possibly a portion of the designated payout.

Are you worried about what happens if you die a month after getting life insurance? Several life insurance options offer immediate payouts.

  • Simplified or Guaranteed Issue Life Insurance: Simplified life insurance skips the medical exam and asks minimal questions about your health. Guaranteed skips both exam and interview. This is an excellent option for people who don’t qualify for standard insurance, but death benefits are less.
  • Early Effective Dates: Some policies have the option for an early effective date. You might have a hard time understanding which date your policy becomes active, so be sure to ask your agent when you’re signing up.
  • Fully Underwritten Policies. The approval process for fully underwritten policies is more extended than standard options, but the policy is immediately active once you’re approved. Fully underwritten policies also require a thorough medical exam, but they’re a good option for people in good health.

If you’re worried about dying right after getting life insurance, ask about the waiting period before you agree to a policy.

Reasons Life Insurance Won’t Pay Out

Regardless of the waiting period, there are several reasons why a life insurance policy won’t pay your beneficiaries in the case of your death. Some of these reasons include:

  • Suicide or homicide. Many companies have clauses that prevent them from having to pay if the insured commits suicide. If the insured is murdered by the beneficiary, that beneficiary won’t receive a payout.
  • Lying on your application. Life insurance policies generally require a health exam, but if you manage to trick a company, there will be an investigation upon your death. If they determine that you lied on your application, your beneficiary will likely be denied payment.
  • Alcohol or drugs. Insurance companies will likely deny a payout if you were using drugs or were suffering from alcohol addiction. Alcohol and drugs are associated with health dangers that will shorten your life.
  • Extreme sports or hobbies. Everyone has hobbies or interests that make life fun, but if you participate in extreme or dangerous sports, your life insurance might deny your beneficiaries their payout. This includes sports like bungee jumping, skydiving, scuba diving, and even surfing.
  • Criminal activity. If you die while you’re engaged in illegal activity (especially armed robbery), your payout will be canceled.

While most of these will affect how much of a payout your beneficiaries will receive, you can get special insurance for high-risk hobbies. If you’re interested, ask your agent when you sign up.

Get the Right Insurance Today

Life insurance can alleviate your stress if you’re worried about your loved one’s financial future after you die. There are many options if you need insurance that goes into effect immediately, but you should sign up for a policy when your young and in good health for the best rates.

If you’ve been wondering how long do you have to have insurance before you die, you should shop around for quotes. If you’re ready to begin, enter your ZIP code into our free tool today.


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