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Sometimes life insurance applications can take a few weeks to be processed. This is because medical underwriting — the process where your medical history is examined — takes time, as insurers chase up previous doctors or ask you to take new medicals. This is where interim insurance comes in. It covers you during the time it takes for your life insurance application to be processed, just in case something happens.
What is interim insurance cover?
Interim cover insures you temporarily while your life insurance application is still being underwritten or waiting to be approved.
It's designed to remove any gap where you would otherwise have been without cover. If you were to die or be seriously injured during the application process, interim insurance can help pay off debts, loans, cover income payments and more.
Typically, interim insurance will cover you for up to 90 days, which is usually more than enough time for your life insurer to complete the underwriting process.
How does interim insurance cover work?
Interim insurance begins as soon as your insurer receives your completed application form. Generally, it protects you for up to 90 days. If an insured event (such as your death or disablement) were to occur within the 90 days, your interim insurance policy would pay out to you or your beneficiaries. It will cease when any of the following occurs:
- The provider approves your policy application.
- The provider rejects your policy application.
- If you do not accept the policy terms by the required date.
- If you voluntarily drop out of the application process.
- Once you reach the end of the 90-day interim cover period.
Compare life insurance policies that include interim cover
The table below lists the life insurance policies available on Finder that include interim accident cover. NobleOak is the only insurer available to people outside of Western Australia.
What does interim insurance not cover?
An interim insurance policy usually comes with similar cover to the policy you are applying for. For example, if you are applying for death cover (another name for life insurance), you wouldn't be covered for income protection if you needed to take some time off work due to injury or illness.
Interim insurance generally also excludes claims related to the following:
- Any events which occur outside of Australia.
- Suicide or self-inflicted injuries.
- Drugs and criminal activities.
- An occupation that may give a life insurance company a reason to reject your application.
When am I not eligible for interim cover?
You will not be eligible for interim cover under the following circumstances:
- If you have had previous life insurance policy applications rejected, deferred or postponed by either the provider you are applying to or by other providers.
- If you are currently maintaining a similar life insurance policy with either the provider you are applying to or with a different provider.
- If you currently have a separate application pending for a policy that provides a similar level of cover (including interim cover), with either the same provider or another provider.
- If you have submitted your life insurance policy application to the provider with incomplete or missing details.
How much cover does interim insurance provide?
It's often the case that you will receive a lump-sum benefit equal to the same payout as the life insurance policy you have applied for. However, this can vary depending on the insurer. The following examples are an idea of how much you might receive.
- Life insurance. You may be able to receive the lesser of either $1 million or the amount of cover applied for.
- Trauma insurance. You may be able to receive up to $1 million worth of cover.
- TPD cover. You may be able to receive up to $1 million worth of cover.
- Income protection. You may be able to receive up to $10,000 a month for up to 1 year.
How long does interim cover last?
Interim insurance usually lasts for 90 days. You should also be aware that the 90-day period is rarely, if ever, extended by life insurers, even if the underwriting process extends beyond that time frame.
It's uncommon for an insurer to take longer than 90 days to approve your application, so there's no need to worry about the underwriting process taking longer than this and your cover lapsing.
What happens if interim cover lapses before my insurance is approved?
Generally, 90 days is considered more than enough time for your application to be approved so it's unlikely that your interim cover will lapse. If your application does go over that 90 day period however, you will no longer be covered by interim insurance.
You can help your application process along by following underwriting requests as quickly as possible and giving all the relevant information to underwriters upfront. You can also put together a complete list of your medical history. This will help with medical underwriting as it's often the most time-consuming part of the application process.
How to claim interim insurance cover?
You can claim interim insurance cover the same way you claim for any other insurance policy. You'll need to notify your insurer. They'll let you know what information they need to support your claim. This may include medical reports or a death certificate.
In most cases, you can apply over the phone or through an online account. Once you've sent them everything they need, they will assess your claim. Depending on the circumstances, an insurer will let you know if your claim has been accepted within two months of being notified about it.
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