interesting part of the life insurance
enrollment process is the securing of
temporary life insurance while in
process. Having some type of
protection immediately goes a long way
towards the peace of mind that you are
purchasing through life insurance.
Let's look a little closer at how
temporary life insurance works.
effective date is an important part of
the life insurance enrollment process
for many reasons. Of course the
biggest impact is that it dictates when
you are actually covered for protection.
Most people may think "What does it
matter...now or a few weeks from now".
Unfortunately, we have seen situations
where it does matter and the result can
be catastrophic especially in light of
the fact that the insured person was in
process to purchase life insurance.
It's almost depressing in such a
situation which is why we recommend our
enact the temporary life insurance
featured offered by most carriers.
So what's involved?
First, it's different from carrier to
carrier but let's look at some common
elements of temporary life insurance.
There's usually a quick medical
questionnaire to address the more
serious health issues that might prevent
you from qualifying even for temporary
life insurance. The amounts
allowed are usually capped at a certain
amount. It may be less than the
full policy that you are applying for or
there may just be a hard cap on the
amount which you can receive temporary
life for. For example, if you're
applying for $1M in life benefit,
temporary life may not be available.
life policy effective date is usually the signature
date on the temporary life insurance
application and agreement. This
may be different from the full life
insurance application date.
There's also commonly a stop date during
which this temporary life exists.
This means that if the stop date is 90
day maximum, the coverage will not extend
beyond 90 days after the effective date.
Again, this is meant as a temporary life
insurance benefit just to cover you while
you're in underwriting for the full
policy. It's not designed to go
beyond that point. It's also not
in addition to your underwritten policy
and/or other life insurance benefits.
This means they will subtract other
policy benefits due to you from the
total amount of temporary life insurance
for which you apply.
you are approved for your fully
underwritten life insurance policy, that
policy will generally replace the
temporary life insurance policy and
premiums paid will be applied to the
fully insured policy on a pro-rated
basis. Standard clauses such as
mis-representation, fraud, and suicide
are usually contained in the temporary
life application and agreement.
Payment is an important part of the life
insurance contract and temporary life is
no different. Some applicants will
submit their completed application but
no payment if allowed by the carrier.
This usually means that the proposed
insured is not protected during the
underwriting process. The
underwriting process can take weeks if
not months so we strongly recommend that
you submit payment with your
insurance application. You have at
10 day free look period from
when the carrier delivers a policy to
you to can cancel the policy never
effective for a full refund so there's
no reason not to. You never want
to be in that situation where the
unforeseen happens and you pass away
during the underwriting process without
the protection of temporary life
insurance. As a good life
insurance agent, we can't let you take
this un-needed risk.