Interim cover for life insurance and income protection

What is interim insurance cover?

Interim cover insures you temporarily while your life insurance application is waiting to be approved. The point is to remove any gap where you'd otherwise have been uninsured. If you were to die or be injured during the application process, interim insurance can pay out a benefit. 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.

The interim cover will stop if any of these things happen:

• The provider approves your policy application.
• The provider rejects your policy application.
• If you don't 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.

Name	Product	Maximum Cover	Maximum Entry Age	Terminal Illness Benefit	Claims Acceptance Rate	Average Claim Time	Sum Insured
NobleOak Life Insurance Finder Award		$25,000,000	74	$25,000,000	96.90%	1.1 months	$24,483 million	Our verdict: Finder Life Insurance Award winner for the last 5 years in a row. Good value for money, simple application process and a high claims acceptance rate.	Get QuoteView details Compare	loading Fetching your data...
RACWA Life Insurance		$25,000,000	74	$25,000,000	96.90%	1.1 months	$24,483 million	Our verdict: RAC’s maximum death cover limit of $25 million is one of the highest limits you’ll find, including $5 million in TPD insurance. You can get an online quote, but you’ll need to call RAC to get trauma cover. Benefit from added peace of mind with fully underwritten insurance. RAC is also WA-based but services all of Australia.	View details Compare	loading Fetching your data...

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Or speak to an insurance specialist to help you get cover

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.

These numbers change a bit between different insurers. For instance, RAC offers a maximum interim claim of $1.5 million for life insurance, $500,000 for TPD or Trauma cover, and $2,000 a month for income protection. Be sure to check the details of any policy you're applying for to know for sure.

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.

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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Frequently asked questions

• What is interim cover?

  Interim cover is a feature of life insurance and income protection policies that covers you from the day you fill in your application to when your insurance is approved. The process can take a couple of weeks or months, so interim cover plugs the gap.Most interim cover lasts 90 days, which should be enough for your application to be process and, all going to plan, approved. It's pretty uncommon for an insurer to take longer than 90 days to approve or reject an application.

• How do I claim on interuim 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.

To make sure you get accurate and helpful information, this guide has been edited by Tim Bennett as part of our fact-checking process.

Written by

Gary Ross Hunter

Editor, Insurance & Innovations

Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

Gary Ross's expertise

Gary Ross has written 725 Finder guides across topics including:

• Health, home, life, car, pet and travel insurance
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