Life Insurance underwriting is when your insurer analyzes if you are eligible for a life insurance policy. During this process, your insurer will evaluate your application to determine your risk class and life insurance premiums. During this underwriting period, your insurance provider may offer you a short-term life insurance plan, known as temporary life insurance. However, every insurance seeker may not be eligible for temporary life insurance.
This article discusses in detail temporary life insurance.
Basic Principles of Temporary Life Insurance
Temporary life insurance is different from term and permanent life insurance policies. It allows you to have insurance coverage during the underwriting period you’re waiting to approve your life insurance policy. If a life insurance policyholder dies during temporary life insurance, their beneficiaries will receive the death benefit payout from the temporary policy.
If you are eligible for a temporary policy, it’s triggered immediately after you’ve submitted your life insurance application and given the temporary life insurance coverage payment. The coverage typically lasts up to 3 months. However, your temporary life coverage can be terminated within this period due to any of the following reasons:
- Your application for life insurance was denied.
- Your insurer approved your life insurance application which has now kicked in, stopping your temporary coverage.
- In case of your untimely demise and the death benefit being paid out to your beneficiaries as per the terms of the temporary life insurance.
- You have decided to discontinue seeking the coverage you applied for.
- Your insurance provider contacted you about any insurance-related information, and you didn’t respond on time.
Cost of Temporary Life Insurance
Your insurance provider will calculate your temporary life insurance premium based on your preferred coverage amount. Your temporary coverage will typically require you to pay for a month’s worth of the premium you are applying for. The temporary coverage will start after the payment is made. You might be capped on the coverage amount for your temporary life insurance.
After the underwriting process finishes, in case your policy is approved, you’ll get official approval for your policy, and your insurance premium will be altered as per the actual cost of your newly activated life insurance plan. Your payment could also be used for your first month’s premium. If your policy is rejected, your insurer will refund your temporary coverage money.
Is It Feasible?
Yes, getting temporary life coverage is feasible because it doesn’t usually cost you more than your regular life insurance while providing adequate life insurance coverage during the underwriting period. Therefore, check with your insurance provider to determine if temporary coverage is available while purchasing life insurance. At the same time, you wait for your application approval.
Thinking Beyond Temporary Life Insurance
Remember that if you’re buying a life insurance policy, your beneficiaries aren’t financially protected until your application is approved. Underwriting can take about six weeks, and temporary life insurance can efficiently protect your family.
Wondering if you can qualify for temporary insurance coverage? Contact our insurance experts at Wissink Insurance to determine the type and amount of coverage you’re eligible for.