subject: Pros And Cons Of Having Short Term Insurance [print this page] Common sense tells us that the two things people want when they buy insurance is 1) a great price, and 2) great coverage. For individuals, the task of finding great insurance at a great price is more challenging since long-term coverage is not always what is needed. Is there such a thing as short-term insurance option without the high price?
Absolutely. It's called, quite obviously, short term insurance. As you may expect from the name, short-term health insurance provide health insurance coverage for unique situations in which people need coverage for a flexible time period or a brief time period. People between jobs, people transitioning from school to a job, or those who are planning to get married in the near future, find this type of health insurance arrangement very beneficial. Short-term insurance may also be referred to as temporary insurance, and usually provides coverage for anywhere from a few weeks to a few months. A few insurance plans even provide coverage up to thirty-six months, due to the fact that unemployment concerns have become more acute.
Advantages
- The cost-per-month for short-term insurance is usually less than typical insurance coverage. This is great news for those who are in between jobs and need to save as much money as possible.
- Applying for short-term insurance is much easier and takes less time and hassle than standard insurance.
- A short term plan can work well for those unsure of how long they will need the coverage. The plan can be easily extended if needed.
Disadvantages
- Short term insurance will not cover routine well care visits, physical exams, immunizations, dental cleaning or procedures, or vision coverage. In this respect, short-term insurance is more of a form of protection against serious injury than it is a full-fledged insurance policy.
- One of the most significant disadvantages under temporary medical insurance is that it does not cover any preexisting medical conditions. A pre-existing condition refers to an illness or condition that existed anywhere from 3-5 years before the actual insurance coverage started.
Alternatives to Short-Term Insurance
- COBRA. While short-term insurance has some great advantages, it does not address all the concerns of an individual who may need short-term coverage, especially if he or she has a preexisting condition. There are options. If you are ending a job at which you had insurance coverage, you may be able to extend this coverage under a program called COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act. COBRA coverage will extend your existing coverage, but at a very high price.
- HDHP. Higher Deductible Health Plans is an option that has a high deductible (as mentioned in the name) and zero coverage for out of pocket expenses. Because of this, the cost of an HDHP is usually much lower than a typical health insurance plan. HDHPs do not allow coverage by any other health insurance plan.
by: Rickey Pearce
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