The anniversary of a life insurance policy is the same date each year that you originally purchased the policy. This date marks the beginning of a new policy year.
Here's a more detailed explanation:
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Definition: The policy anniversary date is the date on which the life insurance policy was initially put into effect. This date recurs annually.
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Importance: The anniversary date is important for several reasons:
- Renewal: It signifies when the policy is up for renewal, if applicable.
- Premium Payments: While premium payment dates may be monthly, quarterly, or annually, the anniversary date often serves as a reference point for annual payments or premium adjustments.
- Policy Values: The anniversary date is often used for calculating cash values, surrender charges, and loan values in permanent life insurance policies.
- Benefit Adjustments: Certain policy benefits or riders may be tied to the policy anniversary.
- Risk Cover Commencement: As referenced, the anniversary date can serve as a reminder of the beginning of the risk cover period.
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Fixed Date: Generally, the anniversary date remains fixed throughout the life of the policy, unless specific policy terms state otherwise (e.g., a change made during a policy renewal).
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Example: If you purchased your life insurance policy on March 15, 2024, the anniversary date would be March 15th of each subsequent year (2025, 2026, etc.).
