People mistake the word insurance for a service related to long-life commitment, and it is not always the case. Short Term Life Insurance policy is a plan that has the special characteristic of lasting less than one year and, generally, being acquired by people through a transitioning moment in their lives. It is highly popular due to its very low premiums and non-exigent requirements.
People who are looking at covering short-term financial agreements, such as loans, will find this type of insurance particularly useful.
There are multiple cases for needing short term life insurance policy, with the most common being when you're in between coverage. If you're looking at being covered between policies or if you simply want a short term life insurance quote whilst you negotiate a complex long-term option, a shorter policy could help provide you some peace of mind.
Sometimes people will also be given life insurance benefits with their jobs - if you were to be made redundant, you'll lose your cover. Before finding a new role (which may or may not have a policy attached), it makes sense to only cover yourself with short term life insurance policy.
The other most common usage is to cover yourself whilst going on holiday or visiting a hazardous country or location which your existing life insurance provider will not cover for. A lot of adventures happen in dangerous countries, you might want to look at short term life insurance policies before travelling.
|Type||Short Term||Long Term|
|Length||1 - 12 months||Over a year|
|Cover||Limited - usually only basic coverage due to riskier situation||Considerably higher coverage, both in payout and scenarios|
|Cost||High premiums due to short nature||Lower premiums paid over a longer time|
|Flexibility||Very rigid, with little give on policy options||Far more flexible, giving a huge array of options|
|Overall||Expensive, but extremely useful in certain use cases||More cost effective, but is a far longer commitment|
Most short term life insurance policies will sit somewhere between 1 day, to 1 year. It's rare to see any longer than 1 year, and they usually sit within the 2-4 week length amount.
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We reviewed some of the main aspects of short term policies as well as compared it to the long term. If you found this information helpful, or planning to travel somewhere, take a free quote below.