Is short-term life insurance worth it?

Short-term life insurance is ideal for covering short-term needs, like a hazardous job contract. It’s also a good way to bridge any gaps in your coverage. But if you have financial dependents or obligations lasting several years, it may not be enough.

What is short-term life insurance?

A short-term life insurance policy pays out a lump sum benefit if you die during the specified term. 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 used to supplement an existing policy if you need to boost your coverage for a short period of time.

Short-term coverage might make sense in these situations:

• 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.

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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.

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Name	Product	Issue age	Minimum Coverage	Maximum Coverage	Term Lengths	Medical Exam Required
Sproutt		18 - 60 years old	$50,000	$10,000,000	5, 10, 15, 20, 25 and 30 years	No	This life insurance broker combines technology and the human touch to match you with a policy tailored to your needs.	Go to site More Info	Compare	loading Fetching your data...
Bestow		21 - 54 years old	$50,000	$1,000,000	10 or 20 years	No	Affordable 10- and 20-year term life insurance policies with instant quotes and no medical exams.	Go to site More Info	Compare	loading Fetching your data...
Policygenius		18 - 85 years old	$50,000	$10,000,000	10, 15, 20, 25, 30 years	Depends on provider and policy	Compare affordable quotes from 12+ A-rated life insurance companies side-by-side.	Go to site More Info	Compare	loading Fetching your data...
Everyday Life		20 - 75 years old	$100,000	$10,000,000	10, 15, 20, 25 or 30 years	No	Build a customized laddering strategy to target specific financial responsibilities and save on term life.	Go to site More Info	Compare	loading Fetching your data...
Fabric		25 - 60 years old	$100,000	$5,000,000	10, 15, or 20 years	Depends on policy	Get affordable term life insurance with accelerated underwriting or no-exam coverage up to $1,000,000. Available in all states except CA, NY and MT.	Go to site More Info	Compare	loading Fetching your data...
LadderLife™ Life Insurance		20 - 60 years old	$100,000	$8,000,000	10, 15, 20, 25 or 30 years	No	Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.	Go to site More Info	Compare	loading Fetching your data...

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How do I buy short-term life insurance?

A handful of insurers offer short-term life insurance, including AIG, Legal & General and Prudential. It’s often marketed as annual renewable term (ART) life insurance, which is a one-year policy that your insurer guarantees to renew for a set number of years known as the “insurability period.”

The process of buying short-term life insurance is the same as any other policy type:

1. Compare policies and riders from a range of life insurance companies.
2. Get quotes from your top picks.
3. Choose the best policy.
4. Apply for coverage. This may involve filling out a health questionnaire or taking a medical exam.
5. Pay your premiums on time to ensure your policy doesn’t lapse.
6. When the end of your term is approaching, decide if you want to renew your coverage.

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.

Frequently asked questions

• Is term life insurance the same thing as short-term life insurance?

  No. While both cover you for a specified length of time, you can get a term life insurance policies that lasts 10, 20 or even 40 years. A short-term life insurance policy generally lasts five years or less.

• Can I get a short-term life insurance policy if I have a pre-existing condition?

  Possibly, but it depends on your condition and how much of a risk you pose to the insurer. If you have a terminal illness or are likely to file a claim before your policy expires, your application might be denied. Read our guide to getting life insurance with a pre-existing condition to learn more.

• Do all life insurance companies offer short-term coverage?

  No. If you already have coverage with a life insurance company that doesn’t offer short-term coverage, you may need to use a different provider if you want to increase your coverage for a short period of time.