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Is Short Term Insurance Policy Worth It?

Published On Dec 15, 2021 11:00 AM By InsuranceDekho

A policy with a term of less than a year is known as short-term insurance. These plans are typically purchased in unusual circumstances, such as when the policyholder believes that short-term insurance will be helpful to him and his family. Short-term insurance is a contract between two parties in which one party (the insurer/insurance firm) agrees to compensate the policyholder's beneficiary in the event of the policyholder's death.

While term insurance is one of the most basic types of life insurance, short-term insurance is a further division based on the duration. While it is recommended that you purchase term insurance that covers you until you reach retirement age, preferably up to 60, you can also opt for a short-term insurance policy that covers you for 5 to 25 years.Buyers get short-term insurance to satisfy their immediate needs. The contract length is the most significant distinction between a short-term and long-term insurance coverage.

Short Term Plans Benefits

Let's have a look at some of the most important elements of a short-term insurance policy:

  • Tax Advantages

Consumers are drawn to term insurance because of the tax advantages. Though tax savings should not be the primary motivation for people to buy term insurance, many people do so because of Section 80C of the Income Tax Act, which exempts premiums paid and sum assured from taxation.

  • As A Precautionary Measure

If you are going to be exposed to potentially dangerous situations or events, you should take precautions. You might then purchase short-term life insurance for your family's protection.

  • Support In Cases of Loan

If you expect a hefty mortgage payment or other type of loan repayment in the near future, you should consider buying short-term life insurance to protect your family financially in the event of your death.

  • The Premium

Unlike long-term insurance, where the premium amount is fixed and cannot be modified, short-term insurance premiums can be changed based on your preferences. The amount of the premium can be increased or decreased depending on a variety of circumstances such as earnings, tenancy, disbursements, death, and so on.

  • Policy Renewal

Despite the fallacy that short-term insurance policies cannot be renewed, you can renew your term insurance at any time, whether you have a 20-year or 30-year policy. With this option, you can pay the same premium and receive the same advantages as before.

The assured sum is allocated to the nominee if the person insured dies. The sum will vary depending on the insurance policies. Furthermore, the insured sum can be received in a variety of ways, including a lump sum payment, a portion of a lump sum payment, yearly, quarterly, monthly, and so forth.

  • Additional Rider Benefit 

The additional rider benefit is probably the most underappreciated component of short-term insurance. Riders merely strengthen your policy and enable you to obtain additional coverage. Disability, severe illness, income benefit, and premium waiver are all covered by these riders. Aegon Life offers unrivalled flexibility in terms of policy coverage and benefits. These riders are recommended if your family has a history of critical illness, since they will assist shield your family from the high costs of illness.


Use the term insurance premium calculator to find the appropriate level of protection. You may acquire the precise quotation you need to protect your family in a matter of seconds. The sooner you complete the form, the sooner you will receive the cash. After all, life is all about safeguarding what matters most to you, which is your family.

Also read: Exploring Different Types Of Term Insurance Plans And Their Benefits

Should You Buy Life Insurance Or Term Insurance Policy?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.


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