Short-Term Life Insurance: Coverage for a Few Years
Short-term life insurance is term coverage that lasts a few years instead of decades. It’s meant for a temporary need, like a business loan, a gap between jobs, or the last stretch of a mortgage, and it’s usually the lowest-cost way to protect your family for that window.
There’s no single product called “short-term life insurance.” The term describes several kinds of coverage. Here’s how each one works, what it costs, and when a slightly longer policy is the smarter buy.
Key takeaways
- Short-term life insurance usually means a term of one to 10 years.
- Annual renewable term is the cheapest in year one, but its premium rises every year.
- A 10-year level term is the shortest fixed-price term most carriers sell, and it’s often the best value.
- You can cancel a term policy at any time, so buying a little more time than you need costs little.
Types of short-term life insurance
- Annual renewable term (ART). One year of coverage that you can renew each year without a new exam, up to a set age. The premium goes up at every renewal.
- 5-year term. Offered by a limited number of carriers. The rate is fixed for five years, then rises sharply if you renew.
- 10-year and 15-year level term. Widely available with a fixed premium for the full term. These are the shortest lengths most people buy.
- Temporary coverage while you apply. Some carriers offer limited interim protection while your application is reviewed, under conditions set by the insurer.
Don’t confuse short-term life insurance with short-term disability or short-term health plans. Those replace income or pay medical bills while you’re alive. Life insurance pays your beneficiaries if you die.
Short-term life insurance rates by age
| Age | 10-year (men) | 10-year (women) | 15-year (men) | 15-year (women) |
|---|---|---|---|---|
| 30 | $14–$22 | $12–$18 | $16–$25 | $13–$21 |
| 40 | $22–$34 | $18–$28 | $25–$38 | $21–$32 |
| 50 | $52–$77 | $42–$63 | $59–$88 | $48–$72 |
| 60 | $140–$207 | $115–$170 | $160–$236 | $131–$194 |
| 65 | $250–$369 | $205–$303 | $285–$421 | $234–$345 |
| 70 | $459–$675 | $376–$554 | $522–$769 | $428–$631 |
Run your own numbers with the term life insurance calculator.
Who needs short-term life insurance?
- People between jobs who lost group coverage and want protection until a new employer plan starts.
- Business owners covering a loan, lease, or buy-sell agreement with a set end date.
- Homeowners near payoff with a few years left on the mortgage.
- Adults close to retirement who need coverage until pensions or Social Security can support a spouse.
- Parents with a divorce settlement that requires coverage until child support or alimony ends.
Annual renewable term vs. 10-year level term
| Feature | Annual renewable term | 10-year level term |
|---|---|---|
| Year-one price | Usually lowest | Slightly higher |
| Price over time | Rises every year | Fixed for 10 years |
| Medical exam to renew | No | Not needed during the term |
| Best for | Needs of a year or two | Needs of about 3 to 10 years |
Annual renewable term only makes sense if you’re confident the need will last a year or two. After that, the yearly increases usually make it more expensive than a level policy. Read more about how term life renewal works.
Why a 10-year term is often the best short-term option
Term policies carry no surrender charge, so you can stop paying whenever the need ends. That makes a 10-year term life insurance policy a flexible choice even if you think you need only four or five years. You lock in today’s rate, and if your plans change and you need coverage longer, you’re already protected. In our model, a healthy 40-year-old man pays about $22 to $34 a month for $500,000 of 10-year coverage.
If you need more coverage for just a few years on top of an existing policy, a short policy can also serve as an extra layer. It’s fine to have more than one term life policy.
What to check before you buy
- Renewal terms. How much the premium rises and the age when renewal stops.
- Conversion rights. Whether you can switch to permanent coverage without a new exam, and by what age. The NAIC suggests reviewing these terms before you buy.
- The death benefit. It’s generally free of federal income tax for your beneficiaries, according to the IRS.
Short-term life insurance FAQs
What is the shortest term life insurance you can buy?
Annual renewable term covers one year at a time. Some carriers sell 5-year terms, and 10-year level term is the shortest fixed-price term most carriers offer.
Can I get life insurance for just one or two years?
Yes. Annual renewable term works for one or two years. A 10-year term is often a better value, and you can cancel it once you no longer need it.
Is short-term life insurance cheaper?
The monthly premium is usually lower than for a 20- or 30-year term. In our model, a 40-year-old man pays about $22 to $34 a month for $500,000 of 10-year coverage.
What happens when a short-term policy ends?
Coverage stops unless you renew or convert. Renewal premiums are usually much higher. Learn more about outliving your term policy.