When you apply for a life insurance policy and your application is yet to be approved, a temporary life insurance policy is offered while you wait. Temporary life insurance is a type of policy that cannot be purchased alone but is available when you purchase a longer life insurance policy. It is offered based on your life insurance quote and pays out equal to your coverage amount but up to a certain limit.
Temporary life insurance is a type of short-term life insurance offered during the application process of a life insurance policy. If you pass away before your policy approval, this temporary insurance will pay out to your beneficiaries. This is because it protects your beneficiaries while you wait for the insurance company to approve your policy application.
How Does it Work
Irrespective of whether you are purchasing a term life or whole life insurance, temporary life insurance offers coverage for both. During the life insurance application process and approval. It can take four to six weeks after you complete the process for your coverage to begin.
During this time, temporary coverage will protect your loved ones if you pass away before the policy approval. As long as your insurance company offers the feature, you can include temporary coverage in your actual life insurance application.
When Does a Temporary Life Insurance Policy End?
Temporary life insurance coverage ends after some instances. While this insurance is to cover you and your family while your policy is being approved, just as the name implies, it is on for a limited period. The following situations are cases where this insurance ends:
The limited period, which is usually 60 to 90 days after the policy application, has passed.
- You are denied coverage.
- If you terminate your coverage.
- When your policy kicks off.
In these cases, you will no longer be granted coverage by the temporary life coverage but instead your original coverage.
Why You Should Buy A Temporary Life Insurance
If you do not have any active policy and you pass away before the new policy kicks in, your dependents will not have any financial support. This insurance covers your family during the gap.
Considering a no-exam life insurance or an instant decision life insurance can help you speed up the application process to get your policy active as soon as possible. However, in cases where your policy is or will take a long to be approved, taking a temporary life policy is a good idea.
What Does it Not Cover?
While temporary life coverage covers you during your policy approval waiting period, there are some things it doesn’t cover. Just as life insurance policies generally do not cover intentional deaths and some accidental deaths, this insurance does not cover:
- Death by suicide is not covered by this life insurance; no death benefit would be paid out to your beneficiaries in this case.
- Death due to an unreviled health condition that would have made you ineligible for this coverage will not be covered.
It is, however, important to disclose every piece of information about your health to your insurer to aid proper risk management, as it comes with penalties if undisclosed.
How Much Does it Cost?
Based on the life insurance quote from the insurance company, your temporary life insurance premium is determined. For example, if your quote is $30 monthly for your coverage, your temporary life coverage cost will be $30.
Do I Need a Medical Exam for Temporary Life Insurance?
Most life insurance companies require a medical exam for temporary insurance coverage to kickstart. Medical exams are a common practice in life insurance application processes, and it is practiced by most insurance companies. While this is so, some life insurance companies do not require medical exams for this insurance. Some of these insurance companies include Mutual of Omaha, Legal General America, Transamerica, Brighthouse Financial, Policygenius, and Pacific Life.
Is Temporary Life Insurance Worth Buying?
In several cases, this insurance is worth it because it is very affordable and offers peace of mind. By paying off your first premium on time, this policy makes sure your dependents will be paid a death benefit even before you pass away after the application process has been completed. Some insurers will offer this coverage for free, but you need to make sure your insurer offers it.
