Why is it so difficult to find a 1-year life insurance policy?
I’m currently renting an apartment with my sister, who doesn’t have any income at the moment. While I’m happy to cover the costs for now, I want to secure short-term life insurance to ensure she can pay off the lease if, heaven forbid, something happens to me within the year.
Unfortunately, it seems nearly impossible to find an online policy that’s shorter than 10 years. The few 1-year options I’ve come across all seem to require consultation with a financial advisor, which feels a bit excessive. 😭
I even got rejected from the only Prudential online application for a 1-year policy I could find.
Is there a particular reason that obtaining 1-year life insurance is so complicated? The thought of having to call or meet with financial advisors just to get a year of coverage isn’t appealing to me.
It’s understandable to be frustrated with the process of finding short-term life insurance, especially when you’re looking for something as specific as a one-year policy. Here are a few reasons why it’s a bit challenging:
Market Demand: The demand for short-term life insurance isn’t as high as for longer-term policies, so many insurers focus on more popular products. As a result, fewer one-year options are available, and those that do exist often require more thorough underwriting.
Underwriting Complexity: Life insurance typically involves assessing risk based on age, health, and lifestyle, even for short-term policies. Insurers may prefer policies with longer terms that can spread out the risk over time.
Limited Providers: Not all insurance companies offer one-year policies, and those that do might only market them through financial advisors. They may have specific criteria or underwriting standards that don’t fit into the online application process.
Policy Type: Short-term life insurance is often grouped with other temporary coverage options, like term policies for 5 or 10 years. Many insurers believe it’s easier to offer these longer policies, as it provides a better revenue model.
Communication Preference: Some companies encourage interactions with financial advisors to ensure that potential clients understand what they’re getting and how it fits into their overall financial picture. This approach can help both the client and insurer mitigate risks.
If you’re set on finding a one-year policy, consider contacting a few local agents or brokers who might have access to more options than what you find online. Alternatively, some insurers do offer “accidental death and dismemberment” policies, which can provide some coverage but may not be a perfect substitute. Exploring alternatives may provide the peace of mind you’re looking for without the fuss.