Short-Term Health Insurance: Benefits and Limitations Explained

3 minutes of reading Last update: Sep 13, 2024 | 16:25 IST

Short-term health insurance provides temporary coverage, usually lasting a few months to a year, and is useful for people who can’t afford comprehensive insurance. Here’s what short-term health insurance provides.

Understanding Short-Term Health Insurance

Short-term health insurance, also known as temporary or term health insurance, is designed for people who need immediate protection without the long-term commitment of standard insurance policies. This type of insurance helps people between jobs, recent graduates waiting for employer-sponsored coverage, or anyone who missed the open enrollment period for comprehensive health plans.

Key Features of Short-Term Health Insurance:

Limited protection period: Usually ranging from a few months to a year.

Lower premiums: Compared to long-term plans, premiums for short-term plans are often lower.

Limited benefits: May not cover chronic conditions or certain treatments.

Higher deductibles and co-pays: Short-term plans often have higher out-of-pocket costs.

Duration of protection.

– Short-term health insurance: Usually covers a period of less than 12 months and serves as temporary protection, for example during breaks from work.

– Long-term: Provides protection for a year or more, often intended for ongoing healthcare needs.

Cost:

– Short term: lower monthly premiums, but potentially higher out-of-pocket costs if you need medical care.

– Long term: higher premiums, but broader coverage and lower out-of-pocket costs in most cases.

Right:

– Short-term: Requires basic health information and usually does not include detailed screening tests.

– Long-term: May require detailed medical examinations and medical history, which may impact eligibility or premium rates.

Benefits:

– Short-term: covers essential services but may exclude chronic conditions and provides limited benefits.

– Long-term: comprehensive benefits including preventive care, prescriptions, mental health services and maternity care.

Supplier network:

– Short term: There may be a more limited network of suppliers.

– Long-term: Usually offers a wide network of suppliers.

Renewal:

– Short-term: non-renewable or renewable only for a limited period of time.

– Long-term: renewable provided contributions are paid on time.

Short-term insurance is usually a temporary solution, while long-term plans are more permanent and provide more extensive protection.

Dhirendra Mahyavanshi, Co-Founder & CEO, Turtlemint (insurance technology company) explains when is it a good idea to buy short-term health insurance?

You may want to consider purchasing short-term health insurance in the following situations:

Gap in coverage: If you are unemployed or waiting for a new employer-sponsored plan to start.

Temporary need: If you need insurance for a specific event or situation, such as an international trip or a short-term project.

Economy Option: If you are on a tight budget and only need temporary insurance.

First published: Sep 13, 2024 | 16:24 IST