Good Reasons for Short-Term Health Insurance

Most people's health insurance is either an individual plan that requires medical underwriting or a group plan provided by their employer. But, there is a third type of insurance available as well. Short-term health insurance plans provide temporary major medical insurance for people who are in transitional periods of life, and cannot obtain the two more traditional types of insurance. These plans have several benefits for people who use them.

Temporary

• You may be unable to obtain group health insurance because you are out of work, transitioning between jobs, in a probationary period of a new job or any of several other reasons. If you are self-employed, the premiums for permanent individual health plans may be too high when you are starting your business. Short-term health insurance provides temporary coverage that fills in the insurance gap between permanent plans.

Quick Issue

• Because short-term health insurance plans offer basic major medical coverage only, most plans require only a short "yes or no" medical questionnaire and issue coverage within one business day of your application. This makes these plans a good alternative even if you have already applied for a permanent plan because you will not otherwise have coverage while the insurance company underwrites your application.

Delayed Coverage Option

• If you know you will be quitting your job or losing your health insurance for any reason, you can apply for short-term insurance coverage ahead of time and request an effective date equal to the date you become uninsured. You can typically do this up to 30 days prior to when you want your coverage to begin. This allows for a seamless transition between health insurance plans.

Lower Premiums

• Short-term health insurance plans offer fewer benefits than permanent plans. This can be viewed as a drawback to this type of coverage, but the benefit is that the cost is usually much lower than traditional health insurance. If you are between jobs or cannot afford traditional coverage due to a temporary economic setback, short-term health insurance allows you to remain covered without a major financial burden.