Inception date

Inception date

Inception dates in the financial market refer to dates when a security, fund, or other financial product begins trading. For many products, this date is also when the product is first made available to investors. 

An insurance policy’s inception date is a major component to consider. From the insurance provider’s perspective, it is the day the client makes the initial payment. The same date acts as the renewal date for the continuance of the policy after a 365-day term. 

What is the inception date? 

The inception date is when a financial product or service is first offered. For example, the inception date of a life insurance policy is the date on which the policy is issued. The inception date of a mutual fund is the date on which the fund’s first shares are issued. In the case of a stock, the inception date is the date on which the stock is first traded on a stock exchange. 

Understanding the inception date 

Most insurance policy benefits depend on time. Therefore, the inception date helps calculate the time for such benefits. For instance, in a life insurance policy, the Inception Date is necessary to compute the number of completed years to work out the maturity date. Similarly, it is crucial to know the policy’s inception date to compute the total number of years remaining on a health insurance policy and evaluate if a claim is to be accepted for covering a treatment that is subject to a waiting period. 

The inception date is changed to the date of the first premium payment made after the expiry of the prior policy if the policyholder fails to renew the policy on the deadline or within the 30-day grace period to purchase the same coverage. 

When a policy expires, and the inception date is reset, most insurance dealers and agents fail to inform consumers about its significant effects on them. 

Origin inception date 

The term “original inception date” refers to the policy effective date of the first policy that an insurer  gives a policyholder, provided that policy is accompanied by a continuous and uninterrupted period during which the insurer has offered that policyholder coverage. 

Benefits of an inception date 

Inception dates are important to consider when researching investments, as they can give insights into the history and performance of a product. For example, a fund with a long history may have a track record of strong performance, while a newer fund may be less established but have the potential for higher growth. In general, longer-established products may be more stable and less risky, while newer products may be more volatile but offer the potential for higher returns. 

Advantage of an inception date 

There are several advantages to setting the inception date of a fund. This date can act as a marker for the fund’s performance and provide investors with a way to compare the fund’s performance to other investment options. Additionally, this date provides clarity for investors when making investment decisions. 

Frequently Asked Questions