in this segment we will review the temporary insurance agreement uh commonly referred to as the Tia and so uh what is the Tia as you can see it's a temporary insurance agreement which indicates that the insurance company is willing to give you some temporary insurance and uh why would I want just this temporary insurance well as you may be aware it takes some time to underwrite an insurance policy the insurance company has got to get all of the information that it requires to make the proper medical financial and lifestyle assessment and this usually takes time in fact depending on the age of the individual or the amount of insurance that is involved uh it could take anywhere from 2 to 3 weeks up to 2 months for that insurance policy to be issued now some clients might say well you know I don't want to wait that long for coverage I want to get that coverage starting right away and the temporary insurance agreement is the method whereby you as an agent uh looking at the the client's situation as you gather the information uh about the client uh you can decide whether you can issue to the client uh at that point in time so before full underwriting takes place you have the authority to issue a temporary insurance agreement to the client now uh you it the client must in fact answer answer there usually four or five uh General Health questions that uh if the client an answers honestly know that in other words uh there is no implication from the questions that uh those four or five questions and you as the agent feel that based on the information you know about the client it is highly likely that this client will in fact be issued that policy the insurance company is going to approve them and if that is a situation you have the authority to issue the temporary insurance agreement to the client now the client must uh uh answer those questions as I mentioned they need to be a negative answer truthfully to the questions they need to complete the original application for the insurance policy and they need to submit one month's premium for that insurance policy so if they do all of these things then the temporary insurance agreement is in effect and so what that really means is that if the individual dies during that underwriting period so if they died while that temporary insurance agreement is in effect then the insurance company is going to pay out a death benefit however there is a caveat here and so they're going to pay out that death benefit only if the client would have been insurable after they've done the underwriting and so you know while it's great to issue the temporary insurance agreement there are some conditions around it and the primary one obviously is that you know if uh the client is going to be issued the basic policy that they applied for they're going to be approved for that and if they die during that uh temporary insurance agreement then the death benefit will be paid to the beneficiary however if they died during the tempor the underwriting process the temp while the temporary insurance agreement is in place but the insurance company doing full underwriting uh have decided no that we are not going to issue this policy as it was applied for then there will be no death benefit paid PA during the temporary insurance agreement so there are you know it's there are these conditions we have to uh keep in mind now there are some limits obviously on the temporary insurance agreement um it usually is the lesser of how much they're applying for or the company will have a cap some companies will say uh our temporary insurance agreement uh uh goes up to a maximum of $200,000 or $500,000 uh and so you know you may have a situation where someone let's say they're applying for a million dollars of life insurance and the agent agrees to issue the Tia but the Tia has a cap on it or a maximum of say $500,000 of insurance so even though the original application is for a million of insurance the maximum that is insured under the Tia would be in my example $500,000 so if the person died during the term of that Tia and they are uh going to be approved uh for by the insurance company they're going to insurance company's W willing to take them on as a risk and they die during the Tia uh the beneficiary will receive in my example $500,000 cuz that's the amount that was the cap the maximum under the Tia even though the application for the insurance was for a million dollar so there is this uh you know coverage limit which is the lesser of the fixed amount you know of a fixed amount I.E 2 to 500 depending on the insurance company or the amount that they applied for so if they applied for 100,000 and the maximum was 200 with that insurance company and they died during the Tia then they would simply get uh the beneficiary would get $100,000 the Tia is also going to be subject to the terms and conditions of the policy that uh you're applying for and as I said before if if the company would not have issued that policy in other words let's say the company did the full underwriting and they found there were some medical issues there and decided not to issue the policy then the Tia would not be in effect if the person had died during that Tia agreement no death benefit would have been paid basically what they would have done is refunded the premium that the client had submitted uh with the application now the other point we have to keep in mind is that the suicide clause as you know there is a 2-year suicide clause uh with all insurance policies so if the life insurance commits suicide within the first 2 years no death benefit is going to be paid uh and so that suicide clause applies to the temporary insurance agreement so if someone uh you know applies and you grant as the agent grant them the Tia but then they commit suicide uh then again there would be no payment made because that uh you know suicide would have occurred within the Tia period or within the first 2 years of that policy so uh let's uh go on and look at well how long does this Tia last well as I said before you know in general uh you know the most complicated insurance policy you know maybe it's a lot of insurance and the person is older uh tends to take you know can take anywhere from uh a month to two months maybe even long longer but usually the duration of the temporary insurance agreement uh tends to be at the earliest of uh maybe 60 to 90day uh coverage period or if the policy has issued earlier than that so as soon as the policy original policy has been approved and issued then the Tia is no longer in effect uh and so it's going to be in effect until the earliest of the 60 to 90day period or the date the original policy has been issued or really if the client is not going to be uh insurable by that company uh the Tia will expire on the date that the company notifies the applicant that the application is denied so it's going to be at the earliest of these three uh dates um so uh and as I said in most situations most policies you know the underwriting tends to be uh you know take place within uh certainly 3 to four weeks or or as I say even longer depending on the complexity so uh that's the duration of the Tia so now what do you need to remember as the uh advisor or as the agent well again because the company is giving you the authority to issue this Tia you need to uh look at the situation when you're Gathering the medical information uh and the other underwriting information on the client uh if you feel that this looks like a fairly normal situation you feel pretty confident that this will be issued and a company will accept this risk then you have the authority to issue the Tia but if you know based on the information you're collect ing you know maybe you find out the client might have had some medical issues uh you may you may feel that you know the the insurance company may not issue the policy or they may issue the policy but there might be some exclusions or they may be issuing it on a substandard basis then you know it probably makes uh no sense at that point in time to offer the client the Tia and so again you have the authority to make that decision and if you decide to go ahead and offer it obviously you have to explain it clearly to the client you know when are they what how much coverage are they going to have what would be the situation if they wouldn't have any coverage and obviously if you decide to go ahead and the client decides to go ahead you're going to have to submit the original application with at least one month's premium uh at that point in time so that is our review of the temporary insurance agreement