What is short-term life insurance?
Short-term life insurance is often used to plug a temporary gap in coverage between jobs, to cover increased exposure to short term debt (I.e bridging loans) or if you’re suddenly exposed to more dangerous circumstances for a brief period of time. For example, if you start working offshore or move abroad temporarily.
Available for customers aged between 18 and 70, short-term life insurance ensures your loved ones are provided for in the event of your death. It’s valid for a year (however you can re-apply annually) and is generally for a specific purpose, but shouldn't be used to replace your existing life insurance policy or as a cheaper alternative. It comes in four levels of cover: £50,000, £100,000, £150,000, and £200,000.
Here, we explain how short-term life insurance works, why you should use it, and what scenarios it’s suitable for.
Why would I use short-term life insurance?
If you’re suddenly exposed to more risk or need coverage between jobs, short-term life insurance can give you and your beneficiaries peace of mind and security.
Death isn’t something most of us like to think about unless we absolutely have to. But this means we can avoid putting in place measures that will ensure our loved ones are secure in the event of our sudden passing.
Whether you’re just starting out with life insurance or you’re between policies while changing jobs, short-term life insurance allows your beneficiaries to access valuable funds that, if you should die, can pay off outstanding debt or even just cover everyday expenses during challenging times.
How does short-term life insurance work?
You can take out your short-term life insurance policy online, with no need for a medical exam and no complex underwriting criteria. You’ll then be covered for the next 12 months, regardless of your occupation and wherever you happen to be in the world.
If you die during the year your policy is active, your beneficiaries can make a claim to receive your death benefit. Upon a valid claim, they’ll receive a lump sum of cash that they can use for anything from paying off debt to covering your end-of-life costs or even everyday expenses. The beneficiary of your policy doesn’t even have to be your family - you could name a charity if you’d prefer.
Short-term life insurance can cost as little as £5 per month for £50,000 of coverage. However, you should be aware that the monthly amount you pay for your short-term coverage is dictated by your age and level of risk you’re exposed to.
When should I buy short-term life insurance?
Short-term life insurance is ideal if:
- You’re between jobs and need cover between policies
- You’re new to life insurance and want to try it before you take out a long-term policy
- You’re travelling and are exposed to more risk
- You’re taking out a bridging loan or car finance
- You have other short-term debts that would otherwise be difficult for your family to meet in the event of your death
What isn’t covered by short-term life insurance?
Short-term life insurance is comprehensive cover that doesn’t specifically exclude any death and even covers you for dangerous occupations and extreme sports. However, it can’t cover you for every eventuality, and a few exceptional circumstances are excluded, including:
- If you die as a result of your own criminal act
- If you take your own life
- If you die as a result of taking alcohol or non-prescribed drugs
- If you die as a result of terrorism
- If you die as a result of war (whether declared or not)
Why should I buy short-term life insurance?
Short-term life insurance is comprehensive cover that doesn’t specifically exclude any death and even covers you for dangerous occupations and extreme sports. However, it can’t cover you for every eventuality, and a few exceptional circumstances are excluded, including:
- It’s convenient - unlike long-term policies, you don’t need to undergo a medical exam to access short-term life insurance. You just need to answer some basic medical questions to get your policy in minutes
- It’s affordable - a short-term life insurance policy with £50,000 coverage starts from as little as £4.17 a month. Cover at £4.17 per month is based on gender male or female, non smoker, aged between 18-45, selecting £50,000 cover,1 year term.
- Protect you and your loved ones - ensures your loved ones are looked after when you pass, with coverage available up to £200,000
Find out more about 12-month Term Life Insurance and take out cover online. It’s flexible, and you can re-apply annually subject to your requirements & eligibility.
Last reviewed: 1 April 2024
Next review: 1 May 2024