Have you ever wondered why there are so many different types of life insurance? In short, it's because people have different needs. This allows everyone to find the right policy to protect the people they care about with the death benefit that a life insurance policy provides.
And while most people have a need for long-term life insurance protection, others (and perhaps even you at some point) may need short-term life insurance coverage to help with a specific need. But what is short-term life insurance, and when is a short-term insurance policy a good idea? That answer depends on your individual situation, as well as how much life insurance you currently have in place.
What is short-term life insurance?
Simply put, short-term life insurance is typically a life insurance policy that provides coverage for less than a year. It's meant to cover you for a short period of time, and for a specific purpose. What it's not meant to do is to replace your existing life insurance coverage or to be a cheaper alternative to a more traditional life insurance policy if you have the need for long-term coverage.
Situations when a short-term life may be appropriate
So why would someone consider a short-term life insurance policy? The following are just a few reasons why a short-term life insurance policy may be a good choice as either a single, stand-alone temporary policy, or as an additional layer of coverage to your existing life insurance.
- You're traveling and want to have an additional layer of coverage
- You may be exposed to a dangerous situation or event
- To provide coverage for a short-term loan or business transaction
- When it's more important for you to have a greater amount of life insurance for the short-term vs. long-term needs (such as when you are carrying a mortgage or other substantial short-term debts)
If you're not sure if your situation is better suited to a short-term life insurance policy, consult with a qualified agent or company representative to determine the right product for your needs.