When you select a life insurance policy, you will fill out an application for coverage. In most cases, when you leave your insurance agent's office, he or she will give you a document notifying you that you currently have "conditional coverage" life insurance.
After you fill out an insurance application, your agent sends the policy to the insurance company's underwriting department. The underwriters review the information on your application and eventually make a decision whether to provide you life insurance.
Conditional coverage life insurance is coverage that begins as soon as you sign an insurance application. Basically, it means that you are covered by your insurance policy immediately -- provided that the insurance company's underwriters approve your application.
If you die before the insurance company reaches its decision about your application, the underwriter continues the underwriting process. If the underwriter decides that the policy would have been approved, your beneficiary will receive the amount of money stipulated in your policy. But if the application would not have been approved, your beneficiary may receive nothing or a reduced amount.
The laws governing how long an insurance company has to decide whether to provide you insurance vary from state to state, meaning that the maximum amount of time you are subject to conditional coverage varies based on where you live. The average is around thirty days.
Some insurance companies offer temporary coverage during the underwriting process to people who are generally in good health. Temporary coverage guarantees that your beneficiaries will be paid during the time specified by the insurance contract, regardless of the ultimate outcome of your application.
Definition of Non-life Insurance
Non-life insurance, also called property and casualty insurance, is a type of coverage that is very common and covers businesses and individuals....
What Is a Conditional Life Insurance Receipt?
If you apply for a life insurance policy, fill out your application truthfully and give the agent money for the premium, you...
What Is Extended Coverage Insurance?
Extended coverage insurance is added to a standard property/fire insurance policy to extend the perils of loss that will be covered. In...
How to Increase Existing Life Insurance
If you think you might need more life insurance, you're probably right. Using a needs analysis and finding out what your options...