What is short term life insurance?
Short term life insurance refers to a policy taken out to provide cover protection for one year or less.
It’s often put in place in addition to an existing long term life insurance policy, offering an extra layer of cover for a short period of time, when risk is increased.
In this scenario, if you were to pass away your loved ones would receive two pay outs; one from your standard life insurance and another from your short term life insurance.
Short term life insurance is rarely the best option on its own, as the sum assured is too small to provide sufficient cover.
This type of cover is also expensive, relative to the sum assured and term length; compared to standard life insurance.
Don’t have any cover protection in place?
Simply get in touch and we’ll help you find the perfect cover to meet your specific needs, at the best possible price.
Why you may need short term life insurance?
We believe the vast majority of people benefit from having some form of life insurance to ensure the financial future of loved ones.
However, short term life insurance is ideal for increasing your existing level of protection during periods when your life is at increased risk.
This could include:
- Travelling to dangerous territories either for work or leisure. For example, added protection against terrorist attacks when travelling to a high-risk country
- Being exposed to a dangerous situation or event. For example, climbing a mountain for charity or a cross channel swim
- Short term loan or business transaction to ensure the outstanding balance could be covered if the worst were to happen
- Currently on referral for a long-term policy. Short term cover can offer protection for your family whilst you’re waiting for your long term policy to be approved. Although it’s worth noting, many insurers offer free accidental benefit for 90 days whilst this process takes place
- Between jobs, when there’s no death in service, to ensure that if the worst were to happen before receiving this employee benefit, you have some cover in place.
How much is short term life insurance?
Due to short term cover generally being arranged for periods when your life is at heightened risk, the cost of premiums can be significantly higher.
Premiums are calculated based on the likelihood of a claim being made. Due to the increased risk during this period, the likelihood is higher and as a result, premiums increase.
The cost of short term life insurance takes into account the same factors as standard life insurance; age, term length, health, sum assured, smoking status and lifestyle.
This results in the known risk to the insurer being less certain and again this is reflected in the cost.
Due to the short term nature of this cover, rather than being paid on a monthly basis, it commonly requires a one-off premium payment.
Who needs short term life insurance?
Short term life insurance is best suited for anyone requiring additional protection on top of their existing life insurance to cover a short period of time when their life is at increased risk.
This type of life insurance policy is often taken out by military personnel to compensate for their increased level of danger whilst they’re deployed.
While this is a good way to provide an additional level of protection, if deployment becomes a regular occurrence, it may be more cost-efficient to take out a long term policy.
As discussed, your age and wellbeing impact the cost of premiums, therefore, taking out an additional long term policy whilst you’re younger and in good health will result in paying lower premiums.
This long term cover could be arranged to provide cover for the rest of your career.
Am I eligible for short term life insurance?
Generally speaking, anyone up to the age of 70 could be eligible for short term life insurance.
However, your medical wellbeing and level of risk will affect your ability to secure cover.
The medical information and investigation are generally less thorough than long term life insurance to allow cover to be accepted faster.
However, this does mean the level of risk to the insurer is less certain and will be reflected accordingly within the cost of the premiums.
Do I need short term life insurance?
Whilst short term life insurance does have a place, it’s often best used as an additional layer of cover on top of a long term policy.
Contact our dedicated team to discuss your situation and we’ll give you all of the information you require to make an informed decision.
For those who have no form of life insurance cover in place, a long term policy is usually the best option.
At Reassured, we can review quotes on your behalf for free, helping you arrange the right type of cover to meet your needs.
The difference between short term and long term life insurance
One of the key difference between short term and long term life insurance is the period of time for which the policy offers protection.
Short term life insurance typically provides cover for up to one year, whereas long term life insurance tends to provide cover for anywhere between 2-40 years.
Whilst the same sum assured can be secured via either method, short term cover is generally more costly due to the known risk of the policyholder.
Short term life insurance quotes
Both the premium cost and the terms of a policy can vary significantly between different insurers.
Therefore, in order to secure the right policy, at the best price, it’s imperative to compare quotes.
Whilst at Reassured we only offer long term policies, depending on your circumstances, it may be that this is a better option than arranging short term cover.
Simply contact Reassured today and we’ll provide you with a range of quotes helping you arrange the right type of cover to suit your needs.
And the best bit is that our award-winning broker service is completely free to use.