Short-Term Life Insurance is a life insurance coverage. This is a type of insurance policy that’s a good option for you if you need insurance coverage for only a limited time, such as when you’re paying off a debt or starting up a new business.
On a similar note, STLIP is a type of term life insurance policy that provides a fixed rate for a specific period like once a year-although few companies offer short-term policies for about five years.
This kind of insurance policy is often used to fill a gap in coverage while you’re patiently waiting for a long-term policy to finish its effect or to offer coverage during a life transition.
How Short-Term Life Insurance Works
Similar to other forms of life insurance, short-term policies require premium payments in order to provide coverage.
Your beneficiaries receive a death benefit when you die for so long as the policy is active. The duration of the policy is the key distinction, however, there are other ones as well.
- Duration
- Premiums
- Renewal
- Underwriting
STLIP varies in types, see the following subheading, and find out.
Varying Types of Short-Term Life Insurance
If you decide you no longer need the coverage and stop making payments for it, any life insurance policy can be made temporary.
But if you just need coverage for a short while, it’s typically cheaper to purchase a policy that is made to last just that long.
Here are some common types of short-term life insurance:
- Annual Renewable Term Life: Here, term life is renewed annually. You have the option to renew every year that you still require coverage. If you anticipate that you’ll require coverage for a year but want the ability to renew the contract if required, it can be an appropriate option. With each renewal, rates will rise.
- A Term Life Policy that is One Year in Length: This policy expires after a year and cannot be renewed. After a year, you must purchase new insurance if you still need coverage. Progressive (via Fidelity Life), Brighthouse, and Principal offer one-year term life insurance policies.
- A Five-year Term Life Policy: Some life insurers provide five-year term life plans, while most of them start with terms of 10 years. For instance, Haven Life’s Haven Simple insurance includes a five-year term life option.
Pros & Cons of Short-Term Life Insurance
Before you purchase an insurance policy, consider the pros & cons of short-term life insurance, see the following:
Pros
- Affordability
- One Premium
- Quick Approval
Cons
- Can get expensive
- Not always renewable
- No cash value
The Cost of STLIP
For males aged 30 to 32 and ladies aged 39 to 41 who do not use tobacco, Progressive (through Fidelity Life) will provide a $50,000 one-year term life insurance coverage for as little as $7 per month. The cost of the insurance may even be lower if you are younger than this.
There are some factors that play along with how much you pay for short-term life insurance:
- Age: The Younger you are, the lower your premiums will be
- Coverage amount: The more coverage you need, the higher your premiums
- Health: Once you’re in good health, you can get lower rates. On the other hand, if you have an already existing medical issue, you may have to pay a higher premium or be denied the coverage.
How to Choose a Short-Term Life Insurance Policy
As you find a suitable short-term life insurance policy, consider the following factors:
- Coverage Amount
- Coverage Length
- Price
- Renewability
Temporary Life Insurance Policy
Temporary life insurance, which is distinct from short-term life insurance, is intended to fill coverage gaps while you wait for another policy to be approved.
The insurer will normally ask you to agree to a medical examination and supply additional details about your health and way of life when applying for a life insurance policy.
The entire process might take weeks or even months to finish when you might be without insurance.
Some insurers sell temporary life insurance to fill this coverage gap, which can give security for a short period of time (such as 30 or 60 days) while you wait for approval.
Source: TopCelebBio