Katherine Murbach is an associate editor and a licensed life insurance expert at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.
Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.
Life insurance usually lasts for 10 to 30 years if you purchase a term life insurance policy, and your entire life if you purchase a permanent life insurance policy. But due to the application process, there can be a coverage gap between when you decide you need life insurance and when you actually have it. That’s where short-term life insurance comes in.
What is short-term life insurance?
A short-term life insurance policy provides some coverage while you're waiting to get a longer-term policy. Policies last a year or less and protect you if you’re not sure if you need a long-term policy or you're waiting for your insurer to come to a decision on your application.
Short term policies also have their own set of limitations, like increasing premiums and coverage maximums.
Key takeaways
Short-term coverage can provide temporary protection if you’re waiting for the policy you applied for to become active.
Annual renewable life insurance lasts one year and premiums increase each year the policy is renewed.
Your life insurer may offer temporary life insurance while you apply for your actual life insurance policy.
What are the main types of short-term life insurance?
Short-term life insurance commonly refers to two products: temporary life insurance and annual renewable life insurance. Both can offer you coverage for a short period of time but they serve different purposes.
Temporary life insurance
Temporary life insurance is a short-term policy option offered by life insurance companies that provides some coverage while you wait for your policy to go in force.
Because the application process often requires a health interview and a medical exam, it can take one to two months to complete — sometimes longer if the insurance company requires additional information. Unless you have a temporary policy, you don't have any life insurance coverage until you sign your final policy offer and pay your first premium.
Some life insurance companies will draft your first month’s premium early to cover the temporary insurance. Other companies will simply ask to have your banking information on file and only draft your premium if you die during the application process — assuming you’d have been approved at the end of the process — and they need to pay out the death benefit.
Annual renewable life insurance
Annual renewable life insurance has a term length of one year and renews on an annual basis. It works similarly to term life insurance, but the premiums often start even lower than in traditional term life insurance and increase each year that you renew the policy.
You may want to consider an annual renewable life insurance policy if you anticipate changes to your life or health that will earn you lower premiums in the future. Examples include:
You’re trying to lose weight or have recently lost weight for health reasons.
You’re trying to quit smoking or are a former smoker.
You’ve been convicted of a felony and are waiting for your probationary period to end.
However, your rates will eventually become more expensive than what you'd pay for a comparable term life policy.
An alternative strategy is to apply for a term policy as you normally would, because many life insurance companies give you the option to apply for reconsideration if you undergo a lifestyle change that may considerably lower your rate, like quitting smoking. This way, you have the option to continue your existing coverage without applying again.
How does short-term life insurance work?
Temporary life insurance cannot be purchased on its own or in place of a long-term policy because it's tied to the policy you are purchasing from your insurer.
Coverage lasts 60 to 90 days or until your application is approved or declined.
Premiums are based on the initial quote your insurer gave you.
Annually renewable life insurance works similar to traditional term life insurance, except it’s only active for one year and allows you to renew it without taking another medical exam.
If you have certain health conditions, you may not qualify for temporary coverage while you wait for approval.
Health conditions that may affect your eligibility include:
Pre-existing conditions may not prevent you from getting life insurance altogether, but they may lead to a longer approval process or more expensive premiums. Working with an independent broker like Policygenius can help you find the life insurance company that’s going to be the best fit for you and your specific health profile.
When does short-term life insurance expire?
Short-term coverage ends when one of the following happens:
Your insurer approves your insurance application and your policy goes in force.
You terminate your proposed coverage and approximately five days have passed.
The cost of a short-term life insurance policy will vary based on your age, health, and whether or not you smoke. Sometimes you can get temporary coverage for free during the application process — your agent will tell you if this is something offered by your insurance company.
Other times it’ll cost you one month’s premium, which will be the same rate your agent quoted you. That payment is then put toward your first premium when you sign your final policy, so in the long run it isn’t costing you any extra money.
Annual renewable term policies start slightly lower than level term policies, but their premiums increase every year.
In many cases, temporary life insurance costs the same as standard term life insurance — the initial monthly premium of your regular policy would cover the cost of your short-term life insurance.
The charts below show average monthly premium prices for a 20-year term life insurance policy for non-smokers and smokers in good health. Quotes are based on the Policygenius Life Insurance Price Index.
Short-term life insurance for non-smokers
Age / Sex
$250K coverage amount
$500K coverage amount
$1M coverage amount
25 year old female
$14.21
$21.11
$33.38
25 year old male
$17.17
$26.96
$44.63
35 year old female
$16.50
$25.60
$42.65
35 year old male
$18.68
$30.36
$51.82
45 year old female
$28.48
$47.90
$86.75
45 year old male
$35.30
$60.79
$112.86
55 year old female
$60.25
$109.05
$208.27
55 year old male
$83.35
$151.16
$284.03
Short-term life insurance for smokers
Age / Sex
$250K coverage amount
$500K coverage amount
$1M coverage amount
25 year old female
$34.07
$57.00
$104.91
25 year old male
$42.12
$72.23
$133.76
35 year old female
$43.79
$76.96
$140.73
35 year old male
$52.59
$92.34
$174.95
45 year old female
$88.82
$162.41
$311.10
45 year old male
$119.72
$221.80
$427.31
55 year old female
$195.53
$361.62
$701.85
55 year old male
$280.48
$518.74
$1,015.76
Methodology: The prices displayed above are based on internal actuarial rate tables for nine life insurance carriers that offer policies through the Policygenius marketplace (AIG, Banner Life, Brighthouse, Lincoln Financial, Mutual of Omaha, Pacific Life, Protective, Prudential, and TransAmerica). The prices represent the average monthly life insurance premium for each sample customer profile (age, gender) and policy type (term, coverage amount) as of September 1, 2022. Monthly averages are based on nine products available through Policygenius for the indicated profile; rates for those products may vary by state, and not all nine products are available in all states. Individual rates may vary, depending on age, gender, state, health profile, and other eligibility criteria.
How much coverage can you get with short-term life insurance?
Check out the table below to see how much temporary life insurance coverage Policygenius' life insurance partners offer. Different restrictions may apply based on your age, location, insurance classification, and the amount of coverage for which you applied.
Most companies offer temporary life insurance in the short term while you’re waiting for your application to be processed. Below is a comparison of different Policygenius partners and their temporary coverage features. Availability sometimes depends on the health classification you’re assigned during the application process.
Application + medical exam or health interview complete
The best way to pick the right short-term life insurance for you based on your unique needs is to work with an independent broker. A licensed agent at Policygenius can work with you through the application process so you’re getting coverage from the best insurer for your circumstances at the most competitive price.
Do you need short-term life insurance?
It's best to get a short-term policy so that you have at least some coverage before you get longer-term coverage.
Annual renewable life insurance could make sense if you need to make health or lifestyle changes, whereas temporary life insurance is an easy option while you wait for the policy you applied for to go in force.
Temporary life insurance will be your best option if you’re already certain you need life insurance and need to get the application process started.
Without short-term coverage, your beneficiaries won’t receive a death benefit if you pass away while you wait for your policy to be finalized or improve your health.
Alternatives to buying short-term life insurance
A traditional term life insurance policy is likely a better fit than an annual renewable policy or other short-term options on the market.
When you put a traditional policy in force, you’re locking in your rates for the entire term — for example, for 20 or 30 years. Since life insurance rates increase every year we age, this will be much cheaper than constantly extending an annual renewable term policy. Depending on your health, you may be able to qualify for an instant decision or a no-medical-exam term policy, too, which can save you time and still get you the long-term coverage you need quickly.
If you’re certain you need life insurance coverage for even longer than 20 to 30 years, permanent life insurance could be a fit for you. If you anticipate significant estate planning needs, or know you’ll have long-term dependents, permanent policies will cover you for the rest of your life, though they are five to 15 times more expensive than comparable term policies.
If you’re not sure which type of life insurance is best for you, speaking with a licensed agent can help.
Frequently asked questions
What is short term life insurance?
Short term life insurance lasts for one year or less. Annual renewable policies last one year and are renewed annually. Temporary life insurance lasts one to three months or until long-term coverage goes in force.
Can you cash out short term life insurance?
No. Short-term life insurance is term life insurance and therefore has no cash value, which is a savings component that only permanent life insurance policies have.
What is the difference between annual renewable and temporary life insurance?
Annual renewable life insurance is a standalone life insurance policy that you need to renew each year. Temporary life insurance is offered by insurers while your application for a long-term policy is processed.
How much does short term life insurance cost?
Costs vary based on your individual health and coverage needs. Annual renewable policies start out cheaper than a term life policy and increase each year. Temporary premiums are based on the initial quote you got from your provider.
Katherine Murbach is an associate editor and a licensed life insurance expert at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.
Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.
