Short Term Life Insurance

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Short term life insurance is a kind of life insurance that was designed with temporary job loss in mind, although it doesn't necessarily have to be for that (but usually is). Short term life policies are offered by insurers so that someone who has lost their job or is making a career transition can have life insurance coverage during their time between paying positions (assuming that these people only had group life insurance through their former employer and did not choose to convert it).

Short term life insurance policies do not build cash value and they last anywhere from one month to one year. The statistical risk of death, especially for a young person, during such a window of time is very small, but the point of life insurance is to protect loved ones against such unlikely or unforeseen incidents. Still, since life insurance premiums and underwriting criteria are based on likelihood of death in a given period of time, life insurance companies don't consider those seeking short term life policies to be significant risks. Thus, short term life policies are guaranteed issue policies that aren't overly expensive.

Short term life insurance can be acquired in less than a half hour and can be completely applied for online--even your "electronic signature" is valid. Coverage will begin that same day, and there are no medical questions or exams. Some companies will require a brief telephone interview just to verify your personal information. You can pay premiums monthly or by another periodicity such as quarterly, just as with "normal" life insurance. Your policy will be in force immediately and your physical policy is typically mailed out within two business days.

There are two types of these policies: term life policies that cover death for any reason (except suicide), and accidental death policies that only pay out if the insured is killed by some kind of accident as defined by the policy's stipulations. Accidental death policies have lower premiums. If you are not yet middle aged or older (if you are under the age of 45) you probably can just get away with accidental death insurance, although if you still owe a lot on your mortgage and/or have small children you may still want to go for a term policy even if you are still in your younger years. Short term life insurance policies can be bought for face amounts of $50,000 to $250,000.

Most short term life insurance policies have a conversion provision that allows you to decide to keep the policy for a new premium structure when its original short term expires. This may require you to prove insurability at that time.

As far as companies go, Guarantee Trust Life is highly respected for regular coverage, and Globe Life is renowned as a provider of accidental death coverage. You can also find other companies to compare rates with online or by contacting the insurance provider you had when you were on the job (or still have on the job if you know you will be leaving but haven't done so yet). Your current provider has an incentive to keep your business, so they might give you the best deal you can find on short term life insurance.

Once again, if you are going to be temporarily unemployed or you are transitioning into self-employment and you have no other life insurance coverage except your group plan, you should not skimp on getting short term life insurance just because the risk of death during the time in question is so low. Even a low risk is a significant risk when there are loved ones involved.

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