Life insurers offer a range of plans. Of these, term life insurance is one of the most basic plans that offer coverage for a fixed term at a fixed premium rate. A life insurance policy is usually associated with insurance coverage for your entire life.

However, most insurers also offer term life insurance policies for shorter terms called Short Term Insurance Plans. In this article, we will talk about a Short Term Insurance Policy and talk about the benefits it offers as well as when you might want to consider opting for one.

Understanding Short Term Insurance Plans

 Life insurance policies offer compensation to the beneficiary of the policy upon the death of the policyholder. People usually buy life insurance policies for a long term that covers their entire life. In a Short Term Insurance Plan, you can purchase term life insurance for a shorter term. This is usually less than a year.

When Would You Need Short Term Insurance?

Term insurance can offer protection to your family and loved ones in the event of an unforeseen disaster. If you are expecting to face some difficult times for a short duration, then opting for a short-term plan can help you get the desired coverage to boost the financial safety net for your family.  Here are some short-term insurance benefits:
 

• Coverage for major changes in lifestyle
  
  In Term Life Insurance, the premium of the policy varies as per the health of the insured person at the time of taking the policy (or renewing it). This means that if you have health conditions that are considered to be risky by the life insurance company, then you might have to pay more premium for the policy.
  
  Most people live sedentary or unhealthy lifestyles since their professional and personal responsibilities leave them with little or no time to take care of their health. However, if you have decided to improve your health, like losing extra weight or quitting an addiction, then you can opt for short-term insurance while you work on getting yourself healthier. As your health improves, you can look for a long-term life insurance plan and get good rates on it.
  
  
• Protection against sudden exposure to danger
  
  Sometimes, you might find yourself in a situation where you are exposed to higher levels of danger each day. For example, you take up a temporary job as a pilot, or on a cruise ship, or move to a location where the risk to life is high. However, this is a temporary situation, and you know that you will not be in it for a long time. In such cases, short-term insurance plans can help you ensure financial protection for your family.
  
  
• A prudent tool against short-term debts
  
  Finance experts recommend taking a life insurance policy with a long-term loan like a home loan to ensure the financial protection and peace of mind of your loved ones. While many people realise the importance of life insurance for home loans, the same approach is not taken for short-term debts. If certain situations have resulted in short-term loans or other financial liabilities, then opting for a short-term insurance plan can help ensure that you don’t leave your family with a huge debt.
  
  
• Employees between jobs
  
  Many companies offer life insurance policies to all their employees. Hence, they don’t buy a separate policy. While some of these policies offer adequate coverage, they are valid only until you are on the job. The policy lapses as soon as you quit the job.
  
  If you are between jobs or have decided to take a sabbatical and pursue a business or higher education, then a short-term life insurance plan can help you get coverage before you start another job.
   

Short Term vs Long Term Life Insurance

Here is a quick look at the comparison between short-term life insurance and long-term life insurance:
 

How to Choose the Right Policy Period for Your Term Insurance Policy?
 

It is easy to plan for the things that you want to do in the future. However, planning for unexpected emergencies can be overwhelming. There are two things that you need to keep in mind while buying term insurance:
 

• How much do you want to be insured for?
• How long do you want the coverage for?
   

While you need to consider your financial obligations and goals to choose the right period, most people opt for a policy that covers them at least until they are earning. Short-term policies can be used to boost your coverage due to sudden changes in your life that expose you to more danger.
 

Conclusion
 

When you decide to buy term insurance, it is important to remember that the policy is designed to help you create a financial safety net for your family and loved ones in the event of an unforeseen disaster. While buying a long term insurance plan is usually recommended, short-term plans can help you get the right coverage during temporary phases of your life when you are exposed to higher risks. Tata AIA Life insurance offers you plans for different tenures depending upon your requirements. Also, you can choose the premium payment term according to your needs

L&C/Advt/2022/Oct/2457.