Getting life insurance for short periods of time
Short-term life insurance is ideal for periods of transition in your life. Times when you’d still like to be insured but you’re aware that your circumstances and needs will change in the near future.
Whether you’re looking for insurance while you transition between jobs and policies, or you’re waiting on a long-term policy to take effect, there are providers out there that will offer you coverage anywhere from a few months to even a single day.
What is short-term life insurance?
Short term life insurance is exactly what it sounds like: life insurance taken out for a short period of time.
It is worth noting that terms of less than a year can be hard to find, especially from major providers. In reality, most short-term life insurance policies are just term life insurance taken out for between 1 and 5 years.
To find a short-term life insurance policy that will cover you for between 1 day and 1 year, you will need to look into smaller, more bespoke life insurance providers. Keep reading and we’ll take you through all your options and how much you can expect to pay.
Why would I need a short-term life insurance policy?
Short-term life insurance is designed for periods of transition in your life, where committing to a longer-term policy isn’t beneficial.
Therefore if any of the following criteria describe your situation, a short-term life insurance policy may be beneficial:
- You’re between jobs. If you’re currently looking to transfer between jobs, you may find that there is a gap in coverage where insurance from your previous employer ends before your new policy begins. Short-term life insurance can help bridge this gap.
- You’re waiting on medical results. If you’re in the process of taking out a long-term life insurance or assurance policy, then you may be required to undergo certain medical tests and exams. The results from these tests can often take a while to come through, and so a short-term life insurance policy can provide short-term coverage until your new policy takes effect.
- You’re heading somewhere dangerous. If you’re travelling to a hazardous location for a business trip or holiday, then your current life insurance policy may not cover those specific locations. In this case, a short-term life insurance policy may be beneficial in providing you coverage, during the duration of this trip - although the premium for this may be substantial and a comprehensive travel insurance policy might be a better option.
Who is eligible for short-term life insurance?
The factors which determine if you are eligible for a short-term life insurance policy vary from company to company. However, when looking into short-term life insurance, you should always consider the following:
- Your age. Many providers will have an age limit on taking out a short-term life insurance policy, which is usually around 70 years old.
- Whether you’re a UK resident. If you’re not a UK resident, then you won’t be able to get a short-term life insurance policy with a UK provider. Some companies will also not pay out if you move abroad within the term of the policy.
- Any pre-existing conditions you may have. Most insurance providers will specify which pre-existing conditions will obstruct your eligibility, and they will vary from company to company. If you do have a pre-existing condition, a lot of insurance companies will still insure you, but your premiums will be higher.
Please note: If you’re looking to get a short-term life insurance policy for under a year, then you’ll need to provide the company with extensive medical and lifestyle information, and you may find that eligibility is harder to qualify for. You can also expect a substantially higher premium than you would with a more standard short-term life insurance policy.
How much coverage do short-term life insurance policies offer?
That depends on your specific provider, policy, and circumstances. As each policy would be tailored to suit your particular needs, the coverage offered by a short-term life insurance policy can vary greatly.
Like with any term life insurance policy, you can get policies which will pay out in the millions. However, this level of coverage is less common with short-term life insurance; your monthly premiums would be drastically increased due to the short period of time in which you’d be paying for the policy. To qualify for such high coverage, you’d also have to fit certain criteria specified by your provider.
It’s more likely that with a short-term life insurance policy, you’d take out coverage in the tens/ hundreds of thousands. As with all life insurance and assurance, the right policy for you will cater to your specific needs and financial circumstances.
How much do policies cost?
It depends. For policies under a year, the total cost usually starts around £300. However, when looking for an estimated cost of term life insurance, you’ll often find average premiums based on 20 - 30 year long policies, and so the cost of short-term life insurance isn’t always made clear.
As with any term life insurance policy, your monthly premiums will be affected by your:
- Medical history
- Family’s medical history
- Desired amount of cover
- Desired term length
The term length is particularly relevant in the case of short-term life insurance, and you’re likely to pay higher monthly premiums (or a total lump sum) to ensure that should you die in this brief term, your loved ones will receive adequate coverage.
Pros and cons of short-term life insurance
Like with any life insurance, you’ll have to weigh up the advantages and disadvantages of a short-term life insurance policy before deciding if it’s the best choice for you. To make things simple, we’ve laid out the main factors you should consider:
- It’s ideal for times in your life when your needs and circumstances are about to change.
- Before you sign anything, you’re able to control the length of your policy.
- You set a payout amount for when you die. No matter when you die within the policy term, your loved ones will receive the same payout.
- You’re not tied down and paying premiums for an extended period of time.
- With policies over a year, the premiums are reasonable and will remain the same throughout the policy term.
- You can get insurance which will provide you with coverage in between long-term policies.
- When the policy term ends, and you try to renew the policy or take out a new cover, the premiums will have risen either due to inflation or your increased age.
- If you survive the policy term, you won’t get any form of payout.
- Policies with terms under a year will cost substantially more than those over a year.
- Depending on the length of your term, you may have to pay the policy’s premium in one lump sum.
What are the policy differences between large and small providers?
The major difference is the length of time you can get cover for, with larger providers generally not offering policies that have term lengths of less than 1 year. Short-term life insurance can be used to describe two types of cover, depending on the size of the company offering the policy:
Larger providers of UK life insurance
The bigger, more reputable companies usually define short-term policies as a form of term life insurance.
Therefore when you take out a short-term life insurance policy, you set an agreed term that you will be covered for and pay monthly fixed premiums during this time. If you die during the policy’s term, then the provider will pay out a lump sum to your loved ones. However if you survive beyond this period, your loved ones won’t receive a payout at the end of your cover, or when you do eventually die.
- These short-term life insurance policies are likely to fit the following criteria:
- A term length of 1 - 5 years
- Paid for in monthly premiums, which would depend on the amount of coverage you’ve taken out and the length of the policy.
- Taken out like any other life insurance policy, but specifying a shorter term than usual.
Different companies have different minimum terms for their term life insurance policies, and can vary anywhere from 1 to 10 years. However, the minimum term may be higher if you’re looking to take out life insurance alongside critical illness cover.
Smaller providers of UK life insurance
Some smaller providers (such as Pulse Insurance) offer niche short-term life insurance policies which can offer coverage for as little as one day, for a single lump sum payment.
Short-term life insurance of this nature is entirely dependant on personal circumstance, but these policies are usually:
- Designed to offer coverage anywhere from 1 day - 1 year.
- Tailored entirely to your personal circumstances, and therefore requires application via email, or even dealing with underwriters directly.
- Harder to qualify for and require extensive medical and personal information.
- Paid for in a single lump sum payment (starting at around £300).
- Capped at a minimum premium, which varies depending on the amount of cover taken out.
Are there other types of insurance for which I can get a short-term policy?
Yes. Many other policy types can offer you shorter terms of coverage. These term lengths can vary anywhere from 1 to 5 years, depending on the type of insurance you take out, the specific policy, and your own circumstances. Here’s a short summary of other short-term policies you can get:
Income protection insurance
Income protection insurance, or IP insurance, is designed to support your financially should you find yourself unable to work as a result of illness or injury. This policy is ideal if you’re self- employed, or you’re not provided with adequate sickness pay by your employer.
You pay in monthly premiums throughout the term of your policy, and should you make a successful claim, you’ll receive a percentage of your gross salary in regular instalments until you’ve recovered and returned to work.
If you’re looking to take out a short-term income protection insurance policy (STIP insurance), you can get regular payouts for a shorter period of time - usually up to 1 year- while you recover.
It’s worth noting that some providers will also include redundancy within their income protection insurance policies.
Payment protection insurance
Payment protection insurance (PPI) is a type of policy which covers any loan repayments, in the instance that you’re unable to work and keep up your payments as a result of injury, illness or redundancy. The protection this policy offers usually lasts up to roughly 2 years and can cover any loans including credit cards and mortgages.
You should be aware there will be a delay between the date you make a claim, and the first payment. Depending on the policy the length of this delay will vary, but it's usually around 90 days after you file for a claim.
Is short-term life insurance right for me?
It depends. To decide whether short-term life insurance is the best choice for you, first you need to work out what it is you’re looking to cover, and more importantly, for how long.
Short term life insurance policies aren’t designed to be taken out consecutively over an extended period, as you’ll end up paying more in premiums than you would with a regular life insurance policy. However, if your needs or circumstances are due to change soon, then you may find that short-term life insurance can offer you the correct level of coverage for where you are currently - until your needs are more consistent, long-term.
It’s often rare for people to take out short-term life insurance policies, as this type of insurance isn’t suitable for people who have mortgages which they’d like covered within their policy.
Where can I get a short-term life insurance quote?
We can help you there. If you’re looking for a life insurance policy with a term less than a year, it can be difficult to find a quote. However these quotes are out there, and providers such as Pulse Insurance even offer life insurance for as little as one day. However, if you want to compare your options, then filling in our form will take you where you need to go.
We’ve also reviewed each of the main life insurance policies and the most reputable insurer of short-term life insurance, so you can find a policy which suits your needs. We recommend reading through all the reviews and information, so you’re sure you know all the details of a policy before you commit.
If you want to get a quote quickly, click the button below and one of our trusted brokers will help you find exactly what you need!