Why is it so challenging to find a 1-year life insurance policy?
I currently rent an apartment with my sister, who isn’t earning an income right now. I’m okay with covering the rent, but I’d like to secure short-term life insurance to ensure she can handle the lease if anything were to happen to me during the year.
The issue is that most policies available online are for 10 years or more. The few one-year options I’ve discovered require an appointment with a financial advisor, which feels a bit over the top, like I’m trying to get a prescription! 😭
I even got turned down by the one Prudential one-year policy application I managed to find.
Is there a specific reason 1-year life insurance policies are so difficult to obtain? I’d prefer not to go through the hassle of consulting financial advisors just for a year of coverage.
It can definitely be frustrating trying to find short-term life insurance options, especially when you’re looking for something as specific as a 1-year policy. Here are a few reasons why it might be challenging to find:
Market Demand: Most people are looking for long-term coverage, so insurance companies focus on policies that can be more profitable over time. Short-term policies, like 1-year coverage, are less common in the market.
Risk Assessment: Insurers typically prefer longer commitments because they can better assess risk over time. A 1-year policy might be seen as riskier or harder to underwrite, which could lead to rejections or stricter requirements.
Administrative Costs: Setting up a policy involves administrative work, which can make short-term policies less appealing to insurers who might not want to go through the effort for a one-time, short engagement.
Limited Availability: Not all insurers offer short-term policies, making the options more limited. You may find that those that do require working with an agent to ensure that the coverage matches your specific needs.
If you’re looking for alternatives, consider these options:
Term Life Insurance: Some insurers offer term policies starting at 5 years, which might still provide your sister with enough coverage until her situation stabilizes.
Accidental Death Insurance: This type of coverage is often more accessible and can provide some financial support in case of an unexpected event, though it typically covers only accidental death.
Final Expense Insurance: While not exactly what you’re looking for, this type of policy could assist with burial and end-of-life costs, providing some peace of mind for your sister.
Ultimately, if you’re uncomfortable with direct communication with financial advisors, you might try looking for insurance comparison websites or online brokers that can help streamline the process without requiring extensive conversations. Good luck, and I hope you find a solution that works for you!