Short term life insurance

A short term life insurance policy lasts a year or less and is designed to fill the gap while you wait to purchase long-term coverage.

Headshot of Policygenius editor Nupur GambhirAmanda Shih author photo

By 

Nupur Gambhir

Nupur Gambhir

Senior Editor & Licensed Life Insurance Expert

Nupur Gambhir is a licensed life, health, and disability insurance expert and a former senior editor at Policygenius. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service Cake.

 & Amanda Shih

Amanda Shih

Editor & Licensed Life Insurance Expert

Amanda Shih is an editor and a licensed life, disability, and health insurance expert at Policygenius, where she writes about life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

Updated January 19, 2022 | 4 min read

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Life insurance policies usually last for a long time — 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 underwriting process, there can be a coverage gap between when you decide you need life insurance and when you actually have it.

A short term life insurance policy like annual renewable life insurance or temporary life insurance provides some coverage while you're waiting to get a longer-term policy. Policies last a year or less and protect you if you can't get affordable premiums due to a current health condition or you're waiting for your insurer to come to a decision on your application. However, short term policies have their own set of limitations, like increasing premiums and coverage maximums.

Key Takeaways

  • Short term coverage provides temporary protection if you need to delay purchasing a long-term policy or are waiting for one to go into effect.

  • 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.

Should I buy 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 makes 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.

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.

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, like if:

However, your rates will eventually become more expensive than what you'd pay for a comparable term life policy. Your best bet is to give yourself a few years under an annual renewable policy before purchasing a new life insurance policy with a longer coverage period.

Temporary life insurance

Most people experience a coverage gap between when they initially apply for life insurance and when their policy goes into effect, also known as the waiting period. 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 requires an interview, medical exam, and final underwriting decision from the insurance provider, it can take five to six weeks to complete — sometimes longer if the underwriter requires additional information. Unless you have a temporary policy, you do not have any life insurance coverage until you sign your policy papers and pay your first premium.

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How does temporary 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.

If you have certain health conditions, like heart disease, you may not qualify for a temporary policy.

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.

Life insurance companyTemporary policy
AIGCoverage up to $1,000,000
Banner LifeCoverage up to $1,000,000
BrighthouseCoverage up to $500,000
Lincoln FinancialCoverage up to $500,000
Mutual of OmahaCoverage up to $1,000,000
Pacific LifeCoverage up to $1,000,000
ProtectiveCoverage up to $1,000,000
PrudentialCoverage up to $1,000,000
SBLICoverage up to $1,000,000
SymetraCoverage up to $250,000
TransamericaCoverage up to $1,000,000

Based on policies offered by Policygenius in January 2022.

Temporary coverage ends when one of the following happens:

  • Your insurer approves your insurance application and your policy goes in force.

  • The amount of time designated for your temporary coverage expires.

  • You terminate your proposed coverage and approximately five days have passed.

  • You are declined for coverage.

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Short term life insurance and COVID-19

Buying a short term policy during the coronavirus outbreak is similar to purchasing a policy before the outbreak. If you want to avoid taking a medical exam right now, a few providers are offering temporary coverage until you’re comfortable resuming underwriting. If your finances have suffered due to the pandemic, an annual renewable policy is a way to get cheaper coverage while you get back on your feet.

Temporary coverage and coronavirus

If you are applying for life insurance during the current COVID-19 outbreak and want to postpone the medical exam, you can opt for temporary coverage until the outbreak subsides and you resume the underwriting process.

Policygenius works with three life insurance companies that offer this supplementary coverage without a medical exam:

To activate temporary coverage with these insurers, you’ll simply need to provide your payment information and sign the application for the broker.

Annual renewable life insurance and coronavirus

If you are considering purchasing an annual renewable life insurance policy during the COVID-19 outbreak, applying will still take five to six weeks or more and require an initial interview and medical exam. If you’re hoping to expedite the application process or skip the medical exam, you may be better off looking into an accelerated or no-medical-exam life insurance policy.

However, if you and your family have been financially impacted by the coronavirus, an annual renewable life insurance policy can be a cost-effective policy option in the short term. Remember that premiums increase each year, so your short term policy may eventually become more expensive than a long-term policy.

Your ultimate goal should be securing a long-term life insurance policy, but if you’re waiting for a policy to go in force or hoping to earn better premiums by delaying buying a long-term policy while you make lifestyle changes, short term life insurance guarantees financial protection for your family in the interim. A Policygenius agent can help you determine the best short term policy for your circumstances.

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 to cash out when it expires.

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.