In most cases an application for life insurance coverage must undergo what is known as the underwriting process. Keep in mind that if an applicant recently went through the underwriting process for a previous application, the underwriters may not require new underwriting information. They may simply use the information retrieved from the previous underwriting process.
The most basic explanation of the underwriting process is that it is used to determine whether or not the applicant should be approved for a life insurance policy. The general question of whether or not the candidate is a good risk will be determined by this process. While this is not a full proof process by any means, the goal is to minimize bad risks and maximize good risks.
Most times when you apply for life insurance, you have the option of also applying for something commonly known as a TIA in the insurance industry. TIA stands for temporary insurance agreement. A TIA can provide temporary life insurance coverage while the applicant goes through the life insurance underwriting or evaluation process.
Why Apply For A TIA?
A TIA is an important consideration because if an applicant dies while the life insurance application is still being evaluated, a TIA would require the insurance company to pay out all or a portion of the death claim, even though the actual policy being applied for has not yet been approved and bound.
How Long Does A TIA Last?
Depending on the specifics of the applicant and the application, a TIA could be in force for up to 90 days.
Things You Should Consider:
Always keep in mind that an insurer does not have to accept your application for a TIA. A claim made on a TIA is only payable if the insurer would have approved your policy at the end of the evaluation process.
Take for example a candidate who applies for life insurance and knows that he has a material medical condition that would make him uninsurable, yet he fails to disclose this to the insurance company during the application. If this applicant also applies for a TIA and happens to die prior to the conclusion of the underwriting/evaluation process, the TIA would be null and void because the applicant did not disclose a material fact for which he was fully aware would change his insurability.
The insurance company would find out about his condition during the underwriting process and he would not have been approved therefore a TIA would be invalid in such a case.
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