Short term health insurance coverage: Benefits and limitations explained

It helps people between jobs or facing a gap in employer-sponsored plans, helping in protection against unexpected medical expenses

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

Understanding short-term health insurance

Short-term health insurance, also referred to as temporary or term medical insurance, is intended for those who need immediate coverage without the long-term commitment associated with standard health insurance policies. Such coverage helps people between jobs, recent graduates awaiting employer-sponsored coverage, or anyone who missed the open enrollment period for comprehensive health plans.

Key features of short-term health insurance:

Limited coverage period: Typically ranges from a few months to a year.

 

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

Limited benefits: May not cover pre-existing conditions or certain types of treatments.

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

Duration of coverage.

 

   - Short-term health insurance: Typically covers less than 12 months, meant for temporary coverage, such as during gaps between jobs.

 

   - Long-term: Provides coverage for a year or more, often designed for sustained health care needs.

 

Cost: 

 

   - Short-term: Lower monthly premiums but potentially higher out-of-pocket costs when medical care is needed.

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

 

Eligibility: 

 

   - Short-term: Requires basic health information and typically doesn’t involve detailed screening.

 

   - Long-term: May require detailed medical exams and health histories, which could impact eligibility or premiums.

 

Benefits: 

 

   - Short-term: Covers essential services but may exclude pre-existing conditions and offers limited benefits.

 

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

 

Provider network: 

   - Short-term: May have a more restricted provider network.

 

   - Long-term: Usually offers a broad network of providers.

 

 Renewal: 

 

   - Short-term: Non-renewable or only renewable for a limited time.

 

   - Long-term: Renewable as long as premiums are paid on time.

 

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

 

Dhirendra Mahyavanshi, Co-Founder and chief executive officer, of Turtlemint ( an insure-tech company ) explains when you should buy short-term health insurance? 

 

Consider buying short-term health insurance in the following situations:

 

Gap in coverage: If you're between jobs or waiting for a new employer-sponsored plan to start.

 

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

 

Cost-effective option: If you're on a tight budget and only need temporary coverage.