What is a Policy Anniversary?
A Policy Anniversary is the annual date on which a life insurance policy was initially issued or last renewed. It signifies a full year of coverage and often serves as a key date for evaluating changes in the policy. On each policy anniversary, the insurance company may reassess the policy terms, benefits, premiums, and interest rates, depending on the type of life insurance.
For example, in cash-value life insurance policies like Whole Life or Indexed Universal Life (IUL), the policy anniversary can be important for calculating interest earnings, dividends, or changes in the cash value. It may also impact the policy’s surrender charges, death benefits, and any other adjustments based on the policy’s performance or age of the insured.
Policy anniversaries are also a time when policyholders might review and adjust coverage or add riders. They provide a convenient reminder for policyholders to check that their coverage aligns with their current financial needs and goals. Any changes made to the policy, like increasing the death benefit or altering premium payments, often take effect on the policy anniversary.
