Temporary insurance in the event of death

The ‘ temporary life insurance with is a policy with an agreed maturity that provides capital to the insured’s family. An excellent solution for those with ongoing financing.

The ‘ temporary insurance in case of death  (or TCM) is a life insurance policy with a duration of predetermined coverage if the insured were missing before the deadline, the beneficiaries would receive a capital. Let’s find out what it is and to whom it is convenient.

What is temporary death insurance?

Let’s think about it for a moment; life itself is risky. There is no need to get discouraged, but it is better to come to terms with reality: we are all subject to change. And the case can also be very unfortunate (let’s do the spells!). If the person producing the income were to go missing or suffer permanent disability, what would happen to his or her family? What if a loan is also active?

The ‘ temporary insurance in case of death is often chosen by those who have a mortgage or other document type of risk of current funding. It is a good idea because, if the insured were to be absent, his family would receive capital and would have a strong contribution to cover any loans in progress. The loss of a loved one can never be remedied, of course, but at least the economic situation would not suffer serious repercussions.

But let’s go in order and understand what a temporary death insurance policy is starting from the definition of the Ania glossary:

“Life insurance that guarantees the payment of the insured capital if the death of the insured occurs within a certain period”

Therefore, a temporary death insurance policy is risk insurance that is valid for a set period. The insured capital can be of a constant amount or decrease each year by a fixed amount. Generally, the risk of death is covered whatever the cause of death.

Usually, this type of contract provides for a coverage of at least one year and a maximum of thirty years. The validity periods most often chosen are ten, twenty, or thirty years. In any case, the interval is chosen by the policyholder and is enshrined in the insurance contract which always contains an expiry date of the coverage.

When the last day of coverage is over, there will be two cases: either the insured person will be alive or he will be deceased (or permanently disabled).


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What happens when the temporary death insurance expires?

We have seen that the expiration date is crucial in TCM contracts. At that moment the insured person may or may not be alive. Here’s what happens if the insured person is alive when the policy expires :

  • the contract will be concluded and the policyholder will no longer have to pay the premium ;
  • the insurance company will no longer be obliged to pay in the event of the death of the now ex-policyholder;
  • the insurance will keep the premiums received.

Let’s see what happens instead if the insured person were to be missing by the due date: with the coverage of temporary insurance in the event of death, the beneficiaries would receive a large sum in the form of capital and their standard of living would not be ruined. We are talking about capital because this is usually the solution used for the settlement in the temporary life insurance policies and not the life annuity for the beneficiaries.

On the other hand, for life insurance policies, liquidation is often proposed and chosen in the form of a life annuity

As we have seen, TCMs offer an economic guarantee to the family and more peaceful life even to those who subscribe to them. I will tell you, mixed life policies are also interesting, which guarantee capital both for life and in the unfortunate eventuality of the death of the insured person. I recommend that you read more about them in the insurance blog article. 

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