When does an insurance policy become 'effective'

RELIANCE LIFE INSURANCE COMPANY LTD. & ANR. VERSUS JAYA WADHWANI 2024 INSC 10   

Issue: What would be the date from which the policy becomes effective; whether it would be the date on which the policy is issued or the date of the commencement mentioned in the policy or it would be the date of the issuance of the deposit receipt or cover note?

Judgment: Date of issuance of the policy would be the relevant date for all the purposes and not the date of proposal or the date of issuance of the receipt.  

The date of proposal cannot be treated to be the date of policy until and unless on the date of proposal, initial deposit as also the issuance of policy happens on the same date where, for example, the premium is paid in cash then, immediately, the policy could be issued. Merely, tendering a cheque may not be enough as till such time the cheque is encashed, the contract would not become effective. The drawer of the cheque may, at any time, after issuing, stop its payment or there may not be enough funds in the account of which the cheque is issued and there could be many other reasons for which the cheque could be returned without being encashed.