by What Is Temporary Life Insurance? Bridge the gap in coverage & protect loved ones while your long-term policy is approved.
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Introduction:
Submitting your first premium payment with your life insurance application and selecting a temporary policy as the initial premium payment option can provide coverage until the insurance provider sets the actual rates of your new policy. Another way of getting covered quickly would be purchasing no-exam coverage that allows for faster coverage without needing medical exams.
Temporary life insurance policies cannot be purchased independently – you must use an existing life policy as the source for temporary coverage.
Definition of Temporary Life Insurance:
Temporary life insurance (TIA or immediate life policy) serves to bridge the gap between when you submit your life insurance application and when your long-term policy kicks in. Similar to long-term life policies, however, temporary life policies offer shorter coverage periods, with health questions that require binary answers of either “Yes” or “No”.
Under this temporary policy, should you die while it has yet to go through underwriting, the insurer is obliged to pay your beneficiaries the death benefit even though your long-term policy has yet to go through underwriting. Unfortunately, it cannot be purchased separately; rather it applies only when applying for life insurance via the underwriting process.
Another alternative to consider is no-exam life insurance policies, which offer comparable coverage but take effect much sooner without needing a medical exam. Premiums tend to be higher as insurance companies take on greater risk with these policies.
Purpose of Temporary Life Insurance:
When applying for life insurance, insurers typically request medical records and conduct a physical exam – this process can often take up to 90 days before your policy goes into effect. Temporary life insurance provides essential coverage while you wait.
Temporary life insurance policies are usually offered by insurers to help cover the expenses related to your application and initial underwriting process. They do this by creating a temporary insurance agreement (TIA), which legally obliges them to pay death benefits to beneficiaries even though your full underwriting of a final policy hasn’t yet taken place.
Say you recently switched jobs and lost employer-sponsored life insurance coverage, Policygenius marketplace offers traditional term life policies which use temporary life insurance premium payments as the initial premium payment towards their traditional term policy. This helps bridge any coverage gaps until your earnings increase again allowing savings to grow again – providing your loved ones with security through death benefits.
Activation of Temporary Life Insurance:
Temporary life insurance policies are usually activated by sending in their initial premium payment with their application for coverage. This enables beneficiaries to receive payouts should an unexpected death occur while final approval remains pending.
Michael, a 35-year-old professional, lost his employer-provided life insurance when he changed jobs and needed temporary life insurance to bridge the gap and ensure his family would still have protection while waiting for his permanent policy approval.
To qualify for temporary life insurance, basic age and health qualifications must be met. You’ll typically have to undergo a medical exam as part of the application process for life insurance policies; however, Policygenius partners with five top life insurers that offer life coverage without medical exams; Brighthouse Financial, Corebridge Financial, Foresters Financial, Lincoln Financial, and Legal & General America offer this feature.
Coverage Timeframe of Policy:
Life insurance applications often take several weeks before going into effect; temporary coverage provides a way for you to bridge this timeframe.
To successfully end temporary coverage, typically speaking you will have to pass the medical exam for your permanent policy – however, this varies by insurer.
As a rule, any payment you make towards your temporary policy will be applied towards the first month’s premium for the permanent policy – sometimes without incurring an additional charge from your insurance provider.
Temporary life insurance can be purchased both as an add-on product to a longer-term policy and on its own. Most insurers provide temporary life coverage; however, independent agents who specialize in life insurance tend to offer it more often. You may request this type of protection during your life insurance application or request no-exam life or instant decision policies instead; which allow applicants to bypass medical exams faster.
Benefits and Payouts of Policy:
Temporary life insurance provides coverage for only a temporary period. Rather than being purchased individually, temporary plans are only made available through long-term plan application processes.
If the insured dies prior to having been approved for primary life insurance policy underwriting, their beneficiaries will still receive death benefit payments based on an agreed-upon quote price and typically equal that of the long-term policy applied for.
Tip: To expedite the life insurance application process, no exam policies offer an easy solution by forgoing medical exams. Also, consider improving your health and lifestyle; insurers take this into consideration when setting premiums.
Some temporary life insurance policies provide an optional conversion feature that enables their insureds to switch over from temporary life to permanent without going through another medical exam. Please review any terms and conditions of such conversion policies prior to making your decision.
Conclusion:
Temporary life insurance acts like a safety bridge during your long-term life insurance application. It’s a short-term solution with a big benefit: financial protection for your loved ones while your permanent policy awaits approval. Consider it a temporary umbrella on a rainy day – quick, effective, and exactly what you need until the storm passes.
You May also like: What is Dependent Life Insurance?
FAQ:
Do I need temporary life insurance?
Temporary life insurance is ideal if you need quick coverage while applying for a permanent policy, especially if you recently lost employer-sponsored life insurance. It protects your loved ones during this gap.
How long does temporary life insurance last?
Temporary coverage bridges the wait for your permanent policy approval (usually a few weeks to 3 months). Some insurers offer it without a medical exam. Any payments made go towards your permanent policy’s premium.
Are there any downsides to temporary life insurance?
Temporary life insurance isn’t meant for the long term and doesn’t build cash value. The death benefit is capped at a specific amount (usually your applied-for permanent coverage amount).
How do I get temporary life insurance?
Temporary life insurance is usually offered as an add-on when applying for a long-term policy. Be honest about your health during application. Some insurers may offer it without a medical exam.
