Many life insurance policies have waiting periods that delay your coverage from kicking in. These waiting periods allow insurers to review various parts of your application. They will evaluate your background and entire medical history to determine what level of risk you present to the company. Your life insurance will be held in limbo during this waiting period until the review is complete.
What Is a Waiting Period?
A waiting period is often put in place so that an insurance company can review your application and determine what type of liability risk you present. The initial waiting period is when you submit your application and the time it is approved and you pay your first premium. The average waiting period is between four to six weeks. Each insurance carrier is different, however. You need to talk to your agent to find out how long your waiting period will be.
Waiting Periods for Death Benefits
Depending on what type of life insurance you buy, there may also be a waiting period before your loved ones can collect the death benefit from your policy. Most policies allow for immediate collection as long as all policy requirements have been met and your premiums have been paid on time. Other policies, like guaranteed life insurance, may have a waiting period for your loved ones to go through before they collect.
No Payout If You Pass Away During the Waiting Period
Waiting periods are a little tricky. While you have applied for a life insurance policy, it doesn’t mean you have purchased it. The policy doesn’t go into effect until the waiting period is over and you have paid the initial premium. If you die during the waiting period, your loved ones will not receive a payout. If you have a guaranteed policy, you may be able to receive any payments you have made in the past with interest added.
Avoiding the Waiting Period
There are ways to avoid the waiting period. Many insurance companies offer accelerated underwriting that will speed up the review process. You can also purchase life insurance that doesn’t require a medical exam. Accidental death policies are also available. These policies are a great choice if you work a high-risk job.
Do You Still Have Questions About Life Insurance Waiting Periods? Contact Us!
If you would like to learn more about waiting periods and how they may affect your coverage, contact us at Steve Wilk Insurance Agency. Our agents are always available to answer your questions! Schedule an appointment today!