What Is the Difference Between Short and Long Term Insurance?


Choosing the right insurance plan can be… Well, overwhelming. With so many options, deciding between short-term and long-term insurance policies can be an exhausting day of researching the differences between plans and options. And while the different types of health insurance serve to protect you and your loved ones, there are significant differences between them.

Today we’re going to break down the exact differences between short term and long term health insurance all in one place. So you don’t have to shuffle through multiple blogs and websites to find the answer you’re looking for.

In order to understand short term medical insurance vs. long term, we’ll take a look at where they differ in coverage, benefits, cost, underwriting, eligibility, and who it’s generally for.

Differences in Duration of Coverage

Short-term insurance policies generally provide coverage for a limited period, typically less than a year. The coverage can range anywhere between 30 and 365 days depending on the plan and your personal needs.

Short term medical insurance is also usually not renewable. However, you can still apply for a new (second) short term insurance plan if you need further protection.

On the other hand, long-term insurance policies are intended to provide coverage for an extended period, typically more than a year.

So, if you’re looking for coverage for a shorter duration, such as for a project or a temporary job, short-term insurance might be the right choice. Similarly, if you’re in for the long haul and seeking coverage that lasts for a more extended period, long-term insurance might be the correct option.

Differences in Benefits

The benefits of short-term insurance are more flexible than long-term insurance. Short-term plans allow for customization of benefits, which provides excellent value for the policyholder. It provides you with the option to choose the package that fits your situation and your budget.

While long-term plans offer more comprehensive coverage they are much less flexible in the customization of benefits and cost.

So, if you’re looking for more customization options, short-term insurance could be the right choice. On the other hand, if you’re looking for broader coverage, long-term insurance plans might be the appropriate choice.

Differences in Cost

Short-term insurance policies are generally much less expensive than long-term policies. However, since short-term plans offer less coverage, the actual cost to the policyholder is difficult to compare without taking into consideration the benefits.

In the United States, you can find short term medical insurance plans that start as low as $30 to $100 a month. Which is considerably cheap.

On the flip side, long term medical insurance in the U.S. usually starts out at around $200- to $300 a month.

Both plan’s costs can go up from those starting points depending on the plan you choose, benefits, length of coverage, state you reside in, and other factors.

So, short term medical insurance is much more affordable coverage, but you need to consult with an insurance specialist to help you compare the actual cost factor for both types of policies.

Differences in Medical Underwriting

Short-term insurance policies are known for their relatively easy application process and acceptance. There are no open or special enrollment restrictions for short term medical insurance. So you can apply for insurance when you need it and start coverage almost immediately.

Long-term policies undergo intense medical underwriting that can result in limited coverage or even denial of coverage, depending on several factors. Short-term policies generally do not cover pre-existing conditions though, whereas long term policies do. They also often have enrollment restrictions where you have to wait to apply.

So, if you prefer a hassle-free and straightforward application, short-term insurance is probably the right choice. Or if you need something without restrictions and as soon as possible. However, if you have a pre-existing medical condition, long-term insurance policies may be the right choice.

Differences in Eligibility

Short-term insurance policies are designed to provide temporary coverage to a specific class of people, those who cannot participate in regular insurance plans for various reasons, such as lost jobs, between jobs, waiting for long-term coverage, or avoiding a specialty plan’s high premiums.

Long-term policy eligibility is open to anyone regardless of their circumstances.

So, if you need access to insurance for a short time or cannot participate in regular insurance plans for temporary reasons, short-term may be the right choice. If you need comprehensive coverage and have no restrictions for eligibility, long-term insurance may be for you.

Which is Right For You?

When it comes to choosing between short-term and long-term medical insurance, the answer is not that simple. It depends on your individual needs, budget, health status, and other factors.

The best thing you can do is research your options thoroughly. Use comparison tools to get an idea of what’s available in terms of coverage and cost; then, you can consult with an insurance specialist to help guide you in making the best decision for your situation.

At the end of the day, having any kind of medical insurance is better than having none at all. So make sure to take some time and weigh your options carefully. That way, you can be sure that the policy you choose will be tailored to meet your specific needs.

By understanding the differences between short and long term insurance, you can make an informed decision that will ultimately benefit you in the long run.