Get peace of mind for dangerous situations or gaps in coverage.
Short-term life insurance can help you get coverage or increase your coverage levels for a short period of time. But if you’re worried about the long-term, it might not be the best idea.
Why we like:
Why we like: LadderLife™ Life Insurance
What is short-term life insurance?
A short-term life insurance policy pays out a lump sum benefit if you die or are diagnosed with a terminal illness. But unlike a traditional term life insurance policy — which generally lasts five, 10 or 15 years — a short-term policy is only active for a short amount of time. Depending on your insurer, you could get a policy that covers you anywhere from a few months to five years.
When is a short-term policy a good idea?
A short-term policy can be purchased by itself as a sole source of coverage, or it can be purchased on top of an existing policy to increase your coverage amount for a short period of time.
Short-term coverage might be a good idea if:
- You’re traveling. If you’re going to be abroad and you want to make sure your family is financially safe while you’re traveling, a short-term policy can offer peace of mind.
- You’ll be in a dangerous situation. This can include physical danger, like extreme sports, or medical danger, like living in an area with a disease outbreak.
- You’re paying off a short-term debt. A short-term policy can make sure that your debts are paid off if something happens to you.
- You recently lost your job. If you had a group life insurance policy through work and lost your job, a short-term policy can be stopgap measure while you search for a new job that might let you sign up for a group policy.
- You need to wait to get a longer policy. Short-term policies can be more affordable than long-term policies, making them a common option for people who can’t afford a longer policy right now.
How much does short-term life insurance cost?
Rates can vary significantly depending on on your insurer and personal history. Your premiums will be based on your:
- Age. Younger policyholders will generally pay lower premiums.
- Gender. Men generally pay more than women due to a shorter expected lifespan.
- Occupation. The types of risks that you are exposed to while you are at work will also affect the premiums you pay. If you work in a high-risk occupation, such as mining or firefighting, expect to pay higher premiums.
- Health. If you have a pre-existing medical condition, your premiums will be higher than those who are in good health.
- Lifestyle. Smoking, excessive drinking and an unhealthy weight can all lead to higher premiums.
- Hobbies and pastimes. The activities that you do outside of work can increase your premiums, especially if they’re considered to be risky, such as skydiving, parasailing and scuba diving.
How do I buy short-term life insurance?
To purchase a short term life insurance policy, use our comparison chart to get quotes from several life insurance companies. Compare them based on price, term length, renewal options and customer service and then fill out an application for the insurer you’re interested in.
Bottom line
A short-term life insurance policy can be a useful way to get temporary coverage or increase your coverage while you’re facing an additional risk. But for long-term peace of mind, compare life insurance policies with longer term lengths to find one that fits your needs.