Temporary life insurance is short-term insurance. It applies to both term life and whole life insurance policies. It protects the policy’s beneficiary for the time frame during which the underwriting process is in progress.
In the event of the policyholder’s death, the insurance company will pay out the death benefit to the beneficiaries attached to the policy. The amount paid as a death benefit is equivalent to the insurance coverage. Here’s a detailed analysis of temporary insurance coverage.
What Is the Cost of Temporary Life Insurance?
The cost of temporary life insurance depends on the amount quoted in the policy when you apply for the insurance. However, the final cost of your premium may change when the policy is finally issued. The cost depends on the findings from the underwriting process. Any payment made will finance the first month’s premium. However, if you withdraw your application or reject the insurance offer, any payment made will be refunded.
How Long Will Temporary Life Insurance Last for?
Usually, temporary life insurance lasts for two to three months, depending on how soon your insurer approves your application. The coverage ends when your application gets approved or when you make payment to activate your policy.
However, in situations when your application gets denied, the temporary life insurance ends right away. Other events that can bring the insurance to an end include:
- The would-be policyholder commits suicide before the final policy is activated
- The policyholder rejects the coverage after the final policy is issued
- The policyholder was dishonest in their application, and therefore, the insurer will not issue a policy
- The insurer refuses to decide on the application while the coverage window is open.
- The policyholder withdraws their application before the insurer can decide on the policy
What Are the Benefits of Temporary Life Insurance?
There are benefits attached to temporary life insurance to make you consider it. Some of them include;
- Coverage gaps are not truly gaps. Policyholders can protect their loved ones while awaiting the issuance of their final policy
- You can get life insurance that suits your coverage needs if you are between jobs.
- Payments made before the final policy is issued are used as a deposit for the first premium when the policy gets activated
- The insurer will make a refund when policyholders reject their coverage.
Is Temporary Life Insurance Applicable to All Kinds of Life Insurance?
Whether you are considering term life insurance or whole life insurance, temporary life insurance applies to both. During the underwriting process, temporary life insurance comes into play before your policy gets activated to provide a form of coverage. Think of it as getting a part-time job before a full-time one.
After the temporary life insurance coverage period, you can decide on a term life or whole life insurance.
Term life insurance is designed for policyholders between 20-65 years, and it lasts up to 30 years. Whole life insurance is for senior policyholders between 65-85 years. It lasts until the demise of the policyholder.
Temporary life insurance is not the only way to protect your loved ones’ financial future. It is only a prerequisite for getting a final policy. At ISU Wissink Agency, we have the right kind of insurance coverage tailored to suit your needs. Our team of experts is always available to help you with the process. Contact us today to get a quote for free!