Temporary Life Insurance (What is it?)

Temporary life insurance gives you the benefit of staying covered during a period when you may be in-between life insurance policies. An insurance company may issue temporary life insurance coverage while waiting for a policy application to be approved. Until you have a temporary life agreement in place and you are approved by your insurer, you may not have the coverage you need.

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Schimri Yoyo is a financial advisor with active life and health insurance licenses in seven states. Born in Haiti. Reared in Brockton, MA. Matured in Philadelphia. Schimri is a proud graduate of Arcadia University, having earned both a Masters in Special Education and an MFA in Creative Writing from the castle-riddled campus in Glenside, PA. By personality and by profession, Schimri is an educator...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Oct 29, 2020

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Temporary life insurance is often confused with term life insurance, and some people use the terms interchangeably. Temporary life insurance gives you the benefit of staying covered during a period where you may be in between life insurance policies. A temporary life insurance policy is often issued during the full underwriting process of your term or permanent policy.

This article will help you decide when you might need temporary insurance and how affordable temporary life insurance is compared with other types of term life insurance quotes.

Before you go any further, take a quick moment to use our free rate tool to see what options are available, and then see how it compares to your temporary life insurance rates.

Table of Contents

What is temporary life insurance?

Unlike permanent life insurance options like whole life insurance or variable life insurance, temporary life insurance solutions cover the policyholder for a specific period of time and coverage expires at the end of that defined period.

Temporary life insurance implies a very short-lived policy with a specific purpose of providing coverage for a period of time when your longer-term insurance has lapsed or expired, or while waiting for underwriting to be completed.

The distinction between term life insurance, short term life insurance, and temporary life insurance relates to the coverage period.

Term life insurance likely implies a longer period of coverage, while temporary or short term life insurance implies coverage for under one year.  While you are on the hunt for term life insurance, you can still be protected with temporary life insurance by prepaying a premium payment.

What is short term life insurance?

Here’s the difference between short term insurance and term life insurance: term life insurance implies a longer period of coverage, while temporary or short term life insurance implies coverage for a period of usually under one year.

Reasons to Purchase Temporary Life Insurance

Is it worth it to buy a life insurance policy? What is a permanent life insurance policy and why would you ever need to purchase temporary life insurance?

For understanding whether term or permanent life insurance is better for you, you might want to consult a life insurance rates comparison chart to see how each type of insurance lines up with your needs.

When it comes to temporary life insurance, you will want to make sure that the coverage you acquire is adjusted to your current lifestyle needs. According to the Insurance Information Institute, almost 1 in 5 people do not think they have enough coverage.

Do I need temporary insurance if I am purchasing life insurance?

Policy application approvals and underwriting can take time.  Although policies like no medical exam term life insurance can offer instant approvals, these policies may not provide the best rate. Some people feel peace of mind having immediate coverage.

Some life insurance companies allow you to prepay a premium to have coverage during the period it takes to submit your application and obtain approval.

This is useful if you are concerned about having coverage immediately, or had life insurance that expired and are seeking a more permanent life insurance plan.

Temporary Life Insurance for Travel

In rare instances, people who travel to dangerous places for work or leisure obtain special insurance. This insurance is highly specialized and is usually purchased through employers.

More prevalent are temporary health insurance policies for travel where your national health care coverage may not be valid in the place you are traveling.

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What Is A Temporary Life Insurance Agreement (TIA)

If you are looking to secure temporary life insurance, your insurance company will have you sign a temporary life insurance agreement. This is the official agreement that you need for temporary life insurance.
This is an important point. Even if your term life insurance has a provision to offer you temporary life insurance or you have an agreement with your insurer to secure temporary life insurance, you are not officially covered until this agreement is in place.

How do I qualify for temporary life insurance?

If you are considering applying for life insurance, you can consider submitting a premium check along with your application. Submitting the first modal premium at the time of application may help you secure temporary coverage while your application is in underwriting.

I say “may” because you will still need to qualify for the temporary coverage after your application is reviewed. This means your medical health condition and age will be factors in securing even temporary life insurance.

Most life insurance companies will ask a series of questions about your medical history and your current medical condition. Temporary coverage is usually available for applicants with no major medical history and those up to age 70.

Usually it will take time for your application to be reviewed and approved. If you are approved, your insurance will cover you retroactively. This means, once approved, if something had happened in the interim, the retroactive insurance would payout.

To understand this better, consider an instance where the insured applies for temporary life insurance and signs an agreement for coverage. He completes the application honestly and accurately but passes due to some unforeseen issue.

The underwriting process and application review should continue through to completion. If the insurer approves the application and all premiums were paid, the family of the applicant has a valid claim on any insurance payout.

What happens to my temporary insurance premium if my policy is not approved?

There are instances where an insurance company does not want to assume the risk for temporary coverage. This is a problem in two ways. First, it indicates finding affordable coverage might be difficult to find. Second, you are not covered for the current period.

If you are concerned about having insurance gaps, you might get ahead of the need for ever relying on temporary insurance by acquiring a policy that guarantees convertibility to a permanent insurance policy.

If you have been paying premiums during the application process and your application is disqualified, you should receive a refund of all payments.

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When does Temporary Life Insurance begin?

Temporary life insurance coverage technically begins as soon as you send in your first premium payment, even if the application is still processing. If the application is approved, your coverage will have started from the first premium payment date.

What happens when your life insurance company says no and denies your coverage? If your application is denied, then you should have your premium payment returned.

When does Temporary Life Insurance terminate or end?

The primary purpose of temporary life insurance is to provide you coverage during a gap between your old insurance policy and your new one. As soon as your application and underwriting for a new policy is in place, your temporary insurance policy will expire.

What if I pass away with only temporary life insurance in place?

Temporary life insurance is designed to cover you in the event that something happens during the interim between your old coverage and your new coverage. Temporary life insurance will payout to your family if something were to happen while you are covered by a temporary life insurance policy.

Just be sure that all of your premiums are paid up and on time. Insurers will allow the policy to lapse even if a premium payment is just a few days late. A helpful tip is to just set automatic payments up and trigger a reminder to check that payments went through on the payment due dates.

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Shopping for Temporary Life Insurance Quotes

Whether you’re looking for temporary life insurance quotes so that your loved ones are protected while you’re in between coverage or for travel reasons or something else, the best places to start your search would be with the top life insurance companies.

The best temporary life insurance rates around are likely found with the following companies, which also happen to be the top 10 life insurance companies by market share, according to the Insurance Information Institute.

  • Lincoln National Corp.
  • New York Life Insurance Group
  • Massachusetts Mutual Life Insurance Co.
  • Prudential Financial Inc.
  • John Hancock Life Insurance Co.
  • State Farm Mutual Automobile Insurance
  • Transamerica
  • Pacific Life
  • American International Group (AIG)

As you can see, the best life insurance companies are some of the most familiar names in the industry.

How much does Temporary Life Insurance cost?

Life other types of life insurance, the cost of temporary life insurance will depend upon your age and general health condition.  Although you may not need to go through as extensive an underwriting process, you will need to complete an application.

If you are younger and in good health, you can find very low temporary insurance rates.

Our free quote tool can help you see who will offer you the most affordable temporary life insurance, with rates starting even as low as $12.72/month.

If you are older and have some health concerns, temporary insurance may be a bit more expensive, but you should consider that as you get older, it is even more important to avoid gaps in coverage.

What Is The Maximum Amount Of Temporary Coverage?

Some life insurance companies allow temporary coverage up to $500,000 while others will extend coverage up to $1,000,000 (this amount includes any existing coverage you may already have). Start dates and stop dates for coverage also vary by company.

In order to learn more, you may want to find an agent with a temporary life insurance license for your state. You can usually look up agents for your state by checking out the NAIC map of state life insurance departments of life insurance by jurisdiction.

Temporary Life Insurance: The Bottom Line

Temporary coverage can be a tremendous benefit to you when applying for life insurance. The added peace of mind may be well worth the initial premium outlay. Plus, the insurance company will return your premium to you if your application is declined for any reason or if you simply decide not to accept their policy offer.

Chances are, if you are looking for a temporary life insurance policy, you are also shopping for longer-term alternatives. Get started on your journey for finding the right policy by clicking on our free rate tool below right now and get a rate in seconds.

References:

  1. https://www.iii.org/fact-statistic/facts-statistics-life-insurance
  2. https://content.naic.org/state_web_map.htm

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