Why is purchasing a 1-year life insurance policy such a challenge?
I’m currently renting an apartment with my sister, who unfortunately has no income at the moment. While I’m managing to cover our expenses, I’m seeking short-term life insurance to ensure she can pay off our lease if something were to happen to me during the year.
The issue is that I can’t find any options online that are shorter than 10 years. The few 1-year policies I did discover require a conversation with a financial advisor, almost like a prescription drug commercial! 😭
I even got turned down for the one Prudential one-year policy application I found.
Is there a specific reason why 1-year life insurance is so difficult to obtain? I’d prefer to avoid the hassle of contacting financial advisors just to secure a single year of coverage.
It’s definitely frustrating when you’re trying to find a short-term life insurance policy and running into obstacles. Here are a few reasons why 1-year life insurance policies can be hard to come by:
Market Demand: The insurance market typically focuses on longer-term policies because they are more appealing to most people. Insurers find that customers are generally looking for stability and coverage that lasts for many years.
Risk Assessment: Life insurance companies assess the risk of insuring an individual, and shorter terms can make risk assessment trickier. They may prefer to offer multi-year policies that allow a better analysis of your overall risk profile.
Administrative Costs: Setting up a policy involves paperwork and underwriting costs, which can make one-year policies less cost-effective for insurers. Requiring a consultation with a financial advisor can help the company justify these costs by ensuring that the policy aligns with your broader financial goals.
Policy Options: While there are companies that do offer short-term or temporary life insurance, these policies might not be as widely advertised online. It’s possible that more options are available through brokers who can provide personalized assistance.
Alternative Solutions: If you’re finding it difficult to secure a 1-year policy, you might also consider other options like accidental death insurance or term life insurance with a rider that allows you to convert to a longer policy if needed.
If you really want that 1-year policy, it might be worth exploring local agents who might have access to products not easily found online. I understand that dealing with financial advisors can be tedious, but they often have insights into the best options for your situation.