This is called short-term or pre-medary insurance. This may be the case when an applicant needs immediate coverage, but wishes to defer the issuance of permanent insurance for a period of three to six months. However, a term insurance policy only binds an insurance company to coverage when all the conditions are met. Therefore, the insurance company may reserve the right to cancel your term insurance at any time during the process (not to be confused with termination, as explained below). Term life insurance should not be confused with life insurance, which, because of its fixed duration or expiry date, is sometimes referred to as a type of term insurance. Term life insurance begins as soon as you file your life insurance claim and an amount equal to the initial one-month premium is deducted by the insurance company. At the time of application, you will receive proof of temporary insurance indicating that you are insured during the insurance process. During this wait, you may think it is wise to have some kind of coverage. Fortunately, you can easily add term life insurance to your application.
The agreement exposes the insurer to some risk, as the TIA temporarily offers coverage to an applicant during the assessment or insurance process, while the applicant awaits the outcome of his eligibility conditions for the purchase of life insurance. Once you have made the big decision to buy life insurance, it is wise to apply for an TIA or term life insurance. This temporary coverage is offered virtually free of charge, as the premium received after policy approval is applied to the first month`s premium. It keeps you safe with immediate coverage that`s available to protect your loved ones, even if the underwriting is complete. Remember that term insurance or TIA is not a type of insurance or product that you can buy yourself; it is simply an opportunity for the applicant to obtain intermediate insurance coverage until an insurance company approves the application. For example, when an applicant receives a « temporary insurance policy » for his or her life insurance application during the insurance policy, the applicant receives immediate life insurance coverage during the insurance process. In this scenario, the applicant is considered insured, whether in fact considered insurable or not. Premiums calculated for this type of maturity coverage are generally based on the applicant`s current age at the time of application. The premium for the main life insurance, which is ultimately acquired, depends on the age of the applicant at the end of the transition period. These types of agreements often differ depending on the insurance company and the situation. Maximum insurance coverage depends on the insurance company you are applying for.
Each company has its own maximum coverage limit for temporary insurance policies. The benefit payable under term life insurance is the lowest amount of insurance or the limit allowed set by that insurer.