If the initial premium is not paid at the time of application, when should the premium be collected?

When the initial premium is not paid at the time of application, it is typically collected at the time of policy delivery. This means that the insurer will provide the policy to the insured along with the expectation that the initial premium must be paid before the coverage officially begins. Collecting the premium at this time ensures that the policyholder has had a chance to review the policy and its terms before committing to the payment.

If the premium were to be collected at renewal or during the application submission, it would not align with standard practices, as renewal occurs after the initial policy term and submitting the application often entails a different procedure. Collecting the premium within a certain timeframe after application could lead to confusion, as policy delivery is clearly defined as the moment when the insured acknowledges acceptance of the terms and is expected to finalize their commitment by making that first payment. Thus, the correct timing for collecting the premium ensures clarity and adherence to procedural norms in the life insurance process.