Simplifying Life Insurance in India
What is a Short-Term Life Insurance Policy?
Lately, short-term insurance policies have grown quite popular because of their affordability.
This insurance policy offers financial protection for a short period of time, like a year or two. It is perfect for covering immediate needs, such as short-term loans, etc.
Keep reading below to learn more about the short-term insurance policy, its importance, and the coverage benefits it offers.
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What is Short-Term Life Insurance?
Short-term insurance is a type of insurance providing temporary financial coverage for a certain period of time. It can be used in any particular phase of life when required.
It is an ideal option for people who are looking for a more affordable alternative and can’t afford long-term policy.
Importance and Benefits of Short-Term Life Insurance Policies
Affordable Premium
This is one of the major benefits of short-term insurance, as one can get it at a lower premium. This policy doesn’t have any investment component; thus, the premium is affordable.Policy Term
Decide the preferred duration of the policy as per your requirements and financial stability. If you want to go for a coverage below five years then then any short-term life insurance policy would be ideal for you.Add-on Covers
With short-term insurance, you can choose if you want to supplement the policy with add-on covers or not. Some of the common add-ons are permanent disability, accidental death, and critical illness.Quick and Easy Application Process
Many times, the application process is quite simple and quick. The hassle-free application can be completed online, and you can get the desired policy quickly.Difference Between Short-Term and Long-Term Life Insurance
To help you gain perspective and simplify the process, here are some differences you need to know between a short-term and a long-term life insurance policy so that you can choose the insurance that is most favourable to your goals and needs.
Types of Short-Term Insurance Plans
Annual Renewable Term (ART) Insurance
Annual renewable-term insurance is one of the popular short-term insurance policies which provides coverage for one year and then the option to renew it yearly at an increasing premium. It is most suitable for temporary financial purposes like short-term loan repayment.Gadget Protection Coverage
Gadget protection coverage is a type of insurance that helps you protect your valuable electronic gadgets. These coverage plans offer a safeguard against your electronic gadgets such as smartphones, laptops, etc in case of accidental damage, theft, or liquid spills. This coverage usually lasts for a period till your device is under warranty or you can even select a specific period.Travel Insurance
Travel insurance protects you every time you plan a trip. At times, there are several uncertainties when you travel abroad for the first time and have yet to learn. Taking travel insurance gets you covered against uncertain events that can cause huge losses in the absence of travel insurance.Critical Illness Insurance
Critical illness insurance is short-term life insurance with a coverage period of 1-3 years. In case you are diagnosed with a heart attack, brain stroke, cancer, or organ failure, having critical illness insurance ensures that you are provided with a lump sum amount as a payout in such a circumstance.When to Purchase a Short-Term Life Insurance Policy?
Consider getting a short-term life insurance policy if:
If you are undergoing significant changes in your lifestyle or physical health.
Protection for short-term liabilities.
If you are near your retirement period and need some financial stability.
You are over 60, and your previous insurance is about to end.
Things to Keep in Mind When Purchasing Short-Term Life Insurance
Here are a few aspects to consider before purchasing short-term life insurance:
Short-term life insurance isn’t a replacement for long-term life insurance as it provides limited coverage and temporary protection.
Sometimes, the renewable premiums increase exponentially with each renewal.
Short insurance policies also don’t provide any investment growth as they are for a brief period.
Short-term life insurance policies offer a cost-effective solution for people seeking a temporary solution. With this insurance policy, the buyer does not have to restrict their money for a longer term; instead, they have a versatile choice to suit their needs.
FAQs on Short-Term Life Insurance Policy
What is a short-term policy?
What is the shortest term for short-term policy?
Is short-term policy better for retirement purposes?
Are there any alternatives to short-term life insurance policies?
How did COVID-19 impact short-term life insurance policies?
Who should purchase a short-term life insurance policy?
Is the cost of short-term policy feasible?
Are there any survival benefits in short-term insurance policy?
Important Guides Related to Life Insurance
Disclaimer
The information provided on this page is for informational purposes only and is sourced from publicly available resources. It is not intended to serve as professional advice or a recommendation.
All policy details, benefits, coverage, premiums, and other figures mentioned are illustrative and subject to change based on individual requirements, eligibility, product terms, regulatory changes, and other factors. Guaranteed returns, if applicable, are subject to policy terms, conditions, and timely premium payments.
Customers are advised to review the policy documents, terms and conditions, and consult relevant experts (such as financial or tax advisors) before making any decisions. For a detailed disclaimer, please refer to our Life Insurance Disclaimer.
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Click here for Life Insurance Policy Wordings.Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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