Short Term Life Insurance

Short Term Life Insurance Explained

Short term life insurance is simply a specialized term for life insurance. It simply means that a particular insurance policy would expire after a period of time. For example, you can purchase insurance for 1 year, 5 years or even 20 years. The insurance company would grant valid claims within the specified period of time, as stipulated by the contract. However, the policy expires after the period agreed upon.

Should you bother with insurance? Think of it this way; insurance provides a level of financial support to nominated individuals after your death. In the event of sudden death, your children and spouse won’t be left out in the cold without any means to support themselves.

Level-cover insurance vs. term insurance

Some people would ask; which is better between level-cover and short term life insurance? The answer really depends on your ability to pay and how much you want to be assured of your dependent’s financial future. Term insurance only pays within the agreed term; hence, the name.

Level-cover insurance also pays a lump amount as long as someone is paying for the required premiums every month. In the United Kingdom and elsewhere, the increase in monthly premiums is often waived for the first decade of the policy. As a person grows older, the premiums are recomputed and adjusted, based on the risk of death.

Most insurance companies can still give a 75-year-old-man such insurance; but don’t expect for the monthly premiums to be low. Chances are, these insurance policies would become very expensive, indeed.

Reasons for applying for short term life insurance

In mathematics, there’s a special sub-discipline called risk computation. The same sub-discipline is utilized to compute risks that determine how much the monthly premiums would cost. These computations also allow insurance companies to identify potential risks, based on a person’s occupation, health and general lifestyle.

Insurance might be a good idea if you’re a rig worker, exposed to machinery and combustible substances in offshore oil deposits. You’re also a high-risk individual if you’re in construction, building towers for power plants in Britain (with elevation in excess of 200 feet).

Even if you’re a trained combatant, it’s still probable that you would encounter harm if you were a member of the Armed Forces. Training and competence has nothing to do with it; even if you’re the smartest pilot in your international airlines team, you’re still exposed to the same risk factors as the others. Hence, the reason for the higher monthly premiums given by insurance companies. GP