Should I Get Short-Term Assurance vie or Life Insurance?

We all know that life insurance coverage is generally a long term affair designed to protect your family against the odds of you dying /finding yourself incapable of supporting them, but what is short term assurance vie? As their name indicates, short term insurance life policies are tools used to protect individuals who are waiting for a “traditional” life insurance coverage to start — which can be delayed by a long a complex underwriting process — during a short period of time, usually less than a year. Let’s discuss this type of insurance a bit further

In Which Case Should You Consider A Short Term Life Insurance?

While life insurance policies are usually drafted for a very long period of time — a minimum of five years, in most cases, and up to thirty years, sometimes — there is at least a couple of scenarios where you would need a much shorter policy, and the overarching theme of all of these cases is you trying to prevent having any coverage gaps. Said gaps can result from two main categories of situations: (1) you waiting for a specific event before purchasing and / or (2) you being temporarily between two term insurance policies.

You may be waiting to purchase life insurance because you are trying to quit smoking before applying, for example — which would definitely be a good idea — or because you need to make some changes in your lifestyle in order to improve your health. In some cases, you may have already applied for life insurance but you’re stuck here, waiting for the policy to go into effect. If something bad happens to you during this relatively short period of time, your beneficiaries won’t receive a dime from the company you were in talk with, obviously.

If you have people who depend on you for financial support, or even if you have outstanding personal /business debts, you need to make sure that you have some sort of insurance coverage while waiting for your whole life — or term — life insurance to kick in. That’s where temporary life insurance policies come in handy.

Temporary life insurance: When Not Having Coverage Is Not An Acceptable Option

If you’re familiar with life insurance policies and products, you already know that, and if you’re new to all of this, here is the truth: the vast majority of people have to deal with a coverage gap between their initial life insurance application and the moment their insurance policy finally goes into effect. Indeed, the typical whole life insurance application process requires an interview followed by a medical exam — and sometimes additional procedures. The whole process from the initial application to the ultimate underwriting decision from the insurance company can take a month, a month and half to complete, and sometimes more if your situation is somewhat particular and requires some further investigation. In the meantime, you don’t have any type of coverage, and the situation remains that way until you pay your first premium.

A temporary life insurance policy is a short-term tool offered by the majority of life insurance providers with the express purpose of addressing coverage gaps and to protect you while your regular life insurance application is still being processed.That being said, there are a few things you need to know about the way temporary life insurance policies work.

How Do Temporary Life Insurance Policies Work?

One of the most important things you need to know about temporary life insurance policies is that they can’t be bought as a standalone product instead of more conventional, term or whole life insurance policies. That’s because temporary policies are tied — by default — to a given whole or term life insurance policy. Furthermore, temporary life insurance policies only last until your regular policy becomes active, no matter the official duration written on the contract. Your temporary coverage inevitably ends when:

  1. You get approved for your term /whole life insurance policy and it goes into effect, or;
  2. Your temporary coverage ends, per the time written on your contract. 

Temporary coverage policies are typically drafted for two to three months, so the second scenario is unlikely, but at least you now know the main features of this type of insurance products.

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