Why is it so challenging to find a 1-year life insurance policy?
I’m currently renting an apartment with my sister, who isn’t working at the moment. While I can cover our expenses for now, I want to obtain short-term life insurance to ensure she can manage the lease if anything were to happen to me this year.
The issue is that it seems nearly impossible to find any options online that last less than 10 years. The few 1-year policies I’ve come across require me to consult with a financial advisor, which feels more like a prescription medication ad 😭
I even got turned down for the only online 1-year policy application from Prudential that I was able to find.
Does anyone know why 1-year life insurance is so difficult to purchase? I’m really not looking forward to the idea of meeting with financial advisors just to secure coverage for a single year.
It’s a great question, and you’re definitely not alone in finding it challenging to secure short-term life insurance. There are a few reasons why 1-year policies can be hard to come by:
Market Demand: The insurance market typically emphasizes longer-term policies, as they provide more stability and predictable cash flow for the insurer. Most people looking for life insurance are interested in long-term coverage, which may explain why one-year options are less common.
Risk Assessment: Insurers often prefer longer terms because they want to assess the risk of insuring someone over a longer period. A one-year policy can be seen as more risky for the insurer, as they have less time to collect premiums to cover potential claims.
Underwriting Process: Short-term policies often require more stringent underwriting standards, which could make the application process a bit more complicated. Some firms may want to ensure that they are making a thorough assessment of your risk profile, which is why they might require consultation with an advisor.
Limited Options: Because there are fewer providers offering one-year policies, competition is reduced, and the options available might not meet your needs as easily.
Alternative Solutions: Instead of a specific one-year policy, consider looking into term life insurance with a shorter duration, like a 10-year policy. The premiums might be slightly higher, but it could provide the coverage you need while not being overly expensive.
If you’re looking to avoid the hassle of meeting with a financial advisor, you might want to explore online platforms that compare various life insurance products, or even consider speaking to an independent insurance agent who can help guide you without being tied to a specific insurance company.
Ultimately, it’s important to find coverage that gives you peace of mind, so exploring various avenues might help you find the right solution. Good luck!