Short Term Policy
What Does Short Term Policy Mean?
A short-term policy is designed for individuals who either lack access to or are not yet eligible for long-term or comprehensive insurance coverage. These policies typically provide coverage for a period ranging from one to six months. Compared to standard insurance, short-term policies offer more limited benefits.
Insuranceopedia Explains Short Term Policy
The objections to a short-term policy are significant:
- Lack of Renewability: Once the policy expires, the policyholder has no option to renew it. They must either purchase a new policy or opt for a more comprehensive, long-term policy.
- Exclusion of Pre-Existing Conditions: Short-term policies do not cover pre-existing conditions. For example, if a policyholder has diabetes before purchasing the policy and experiences complications related to diabetes during the coverage period, they may be denied benefits.
- Limited Usage in the U.S.: In the United States, short-term policies are often used by individuals who have missed the enrollment period for government-provided health insurance. Essentially, this is considered a fallback option until a better policy becomes available.
Anyone using a short-term policy as a stopgap should also compare it against COBRA insurance, which lets people who recently left a job keep their previous employer’s plan for a limited time and does not exclude pre-existing conditions. Once you become eligible for a longer-term plan, this guide on how to choose health insurance walks through the trade-offs between networks, deductibles, and monthly premiums so you can replace the short-term policy with something that will actually cover ongoing conditions.
