Policy anniversary

The policy anniversary falls on the same calendar date each year as the policy date. A policy dated March 15 has an anniversary every March 15, regardless of when the application was signed or the policy was delivered.

Many policy mechanics run on this clock. Participating whole life policies typically credit dividends on the anniversary. Annual premiums come due then. Annual renewable term coverage reprices at each anniversary based on the insured's new age. Universal life annual statements, surrender charge step-downs and some guaranteed insurability options are tied to it, and a term policy's conversion deadline is often stated as a particular anniversary or age. Hypothetically, if a policy's surrender charge drops from 6 percent to 5 percent on the fourth anniversary, surrendering a week after that date rather than a week before saves money.

It's worth putting your anniversary on the calendar. Changes such as switching dividend options, adjusting a universal life death benefit or dropping a rider are often processed as of the next anniversary, and the anniversary statement is a natural time to review values. Our annual policy review guide walks through what to check.