Most people have no idea why there are so many life insurance variations. People often struggle when they have to make a choice which policy will be the best for them. It’s nothing strange because in general, they don’t know the difference between specific types.
According to healthinsurance.org statistics, short-time life insurance is growing in popularity, because it’s much more affordable than traditional policies. If you’ve heard about short term life insurance, but you’re not sure what it really is here you can find the answers to all of your questions.
What is a short term life insurance?
This type of insurance provides coverage, but only for a specified period. But unlike term life insurance, that lasts up to 15 years, this one is not as long. Short term policies usually last from a few months up to 5 years, and the duration depends on the insurer’s company.
It’s also known as “pure life insurance”. The biggest difference between term and whole life insurance is that when one dies, the insurance company just pays a specific amount of money to the beneficiary.
Why do people choose this type of life policy?
In general, most people want long-term policies, but they are often more expensive. It all depends on your situation. You may want to buy short-term life insurance to increase the coverage amount for a specific amount of time. People also tend to buy it when their loved ones are terminally ill, and they want to save their family financially.
When is it a good idea to invest in short-time coverage?
You should consider buying a short term policy when:
You’re travelling. If you’re going to travel, anything can happen. You can provide your family with a safe financial situation during your absence when you are short-term insured.
You’re paying off debts. Thanks to the policy, you can make sure that even if something terrible happens to you, your debts are paid off.
You’re exposed to dangerous situations. It includes any danger you can imagine like extreme sports, surgeries or any medical risk. The example list can be endless. If anything dangerous can happen to you, make sure that you’re insured. And if something happens and you get a denied life insurance claim, make sure to contact a lawyer so you know your options.
You can’t afford a longer policy. The truth is, the shorter the policy is, the better. Short-time life insurances are more affordable than longer policies. If you know that you won’t be able to buy any other type of policy, you should go with this one.
What is the cost of short-time life insurance?
The price of policy may vary depending on a few factors. Here are some of them:
Age – the younger you are, the less premium you’ll pay.
Occupation – some jobs expose you to more risks than the other ones. If you’re a miner, firefighter or a policeman, expect to pay more than librarians or accountants.
Gender – According to statistics, men will live shorter than women, and therefore they usually have to pay more than females.
Lifestyle – Everything that might have a negative impact on your health, such as excessive drinking, smoking, drugs or unhealthy diet will make the price of your premium higher.
Health – People who are in good health are likely to pay less than those who already have pre-existing medical conditions.
Hobbies – If you like to spend your time actively, and you’re continually seeking for adrenaline, it might be bad for your insurance price. If your hobbies are considered as risky, you’ll have to pay a higher amount of premium.
What happens when your short-term insurance ends?
When your policy ends, you can choose one of a few options. You can let your coverage go without renewing it. However, if you still want to be insured, you can keep the current insurance, and continue to pay premiums. Be aware that if you decide to go with this option, your premiums will increase every year, for as long as your policy ends.
There’s also an option to convert your policy into whole life insurance. In this case, make sure that your company has a good reputation, and gives you a quality and inexpensive option.
Having the right insurance is crucial in today’s difficult times. You really need it in order to provide financial stability to your family. Make sure that you’re aware of differences between specific insurance types so that you can choose the one that fits your needs the best.