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According to statistics, one out of every 10 Americans will change jobs this year resulting in a lapse of their life and health insurance. There may be a low risk that these individuals will die or contract a serious illness during that time period. However, it happens more often than you may imagine. That’s one of the reasons why the majority of life insurance companies sell short-term health and life insurance policies.
Provides A Temporary Solution The process to apply for short-term life insurance is normally much simpler and faster than purchasing a long-term policy. Insurance companies assess you as a lower risk because the odds that you will die during a short period of between one month and one year are very low. In fact, you may be able to apply and receive approval for short-term life insurance coverage online in as little as 20 minutes! Another advantage is that you don’t need to undergo any medical examinations so there are no delays in approving your application. Two Types of Short-Term life insurance You only have two options when it comes to short-term life insurance: accidental death and regular. If you are still young, you will probably not require regular coverage. The reason is that you have a higher risk of dying because of an accident, rather than of health-related or natural causes. You will always pay much less for an accidental death short-term life insurance policy than for regular coverage. Short Timeframe & Small Amount of Coverage Short-term life insurance will cover you for a smaller amount of money than a traditional life insurance policy. Instead of large amounts such as a million dollars, you may receive coverage for anywhere from $50,000 to $100,000. Normally, the most coverage an insurance company will sell for this type of insurance policy is $250,000, and even this amount is rare. Similar Premium Payments As Long-Term Insurance The premium payments for a short-term life insurance policy are very similar to a long-term policy. Some insurance companies will require you to prepay your premiums as soon as you have been approved for insurance coverage, whereas others allow you to pay monthly premiums. Many insurance companies also offer what is called a rollover option if you choose to retain your insurance policy for a period of at least 5 to 10 years. Do You Really Need Short-Term life insurance Short-term life insurance is often a suitable option if you currently have no insurance coverage and are waiting for your new employer to issue an insurance policy. This is particularly true if your spouse would have difficulty paying off large debts such as a mortgage or if your children would struggle to pay tuition if you die unexpectedly and leave them with no insurance benefits. The goal of a short-term insurance policy is to help your beneficiaries manage their financial obligations. On the other hand, short-term life insurance is not always necessary, depending on your financial and personal situation. For example, if you are single with no dependents, you may be better to wait until your new employer covers you with an employer-paid insurance policy. This is also the case if your spouse would be able to cover tuition fees for your children or pay off debts using other investments. How to Find Short-Term life insurance • Contact Your Current Insurance Provider You can contact your local insurance company or insurance agent to discuss purchasing a short-term life insurance policy. If you already have an insurance policy with a company, they may offer you lower premiums with a higher payout than obtaining a policy with a new insurance provider. • Contact Your COBRA Health Insurance Provider Your COBRA health insurance provider will often issue very affordable temporary life insurance policy that may cost you as little as a few extra dollars monthly. Cobra, short for Consolidated Omnibus Budget Reconciliation Act is a federal law that requires employers with at least 20 employees to offer group health plans to their employees. They must pay the entire premium and provide continuous coverage for up to 18 months to employees who leave their job as well as their dependents. • Search the Internet For An Insurance Company However, the easiest solution is often to conduct an online search. Almost every insurance company has a website where you can compare rates, discover coverage options and find out more about the company’s policies and background. If you are currently in-between insurance coverage, you may want to consider short-term life insurance. This type of policy offers very affordable, short-term coverage until you are able to obtain more permanent coverage. |
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