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I am about to switch jobs, and starting this coming Friday, I'll have about 6 weeks between jobs, but I don't want to have any gap in my life insurance coverage as I am the sole earner in my family and we have a young son. I've been reading up on life insurance, and I have concluded that:

  1. I probably should have life insurance separate from my work.
  2. The options for life insurance are complicated enough that I do not feel confident making a decision on what to buy within one week.

I would like to get a policy for around 2-3 months just to bridge the gap to my next employer, so I can take my time in figuring out my own life insurance policy. Most of the term life insurance policies I'm seeing are for 5 years at the absolute shortest, though I've seen allusions to shorter policies around as well.

Should I be looking for a policy specifically tailored for my situation, or should I just buy a 5/10 year term life policy, and cancel it when I have found a more permanent solution?

I am a 33 year old non-smoker with no chronic health problems, so I suspect I do have a bit of time before life insurance gets terribly expensive.

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    I imagine that a 33yo who is healthy can get a cheaper rate on the open market than through an employer's group offering. However, you seem pretty sure that your next employer will offer you something better than what you would get in the interim. Why not just buy a term policy in lieu of paid employer coverage? – Wesley Marshall Apr 1 at 4:14
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    I know that one possible rider to travel insurance is "24 hour AD&D" coverage. I don't know enough to state if you can actually get travel insurance without an itinerary (lets call it your "funemployment staycation") so I won't make this an answer, but I would point you to check out travel insurance writers as experienced with short term coverage for a single premium with variable coverage including death payouts. – user662852 Apr 1 at 15:09
  • There are companies that offer some kind of annual travel insurance. – stannius Apr 1 at 16:16
  • Are you in the US? – quid Apr 1 at 17:02
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You didn’t say your location which could matter for the insurance laws and policies available.

Realistically you won’t get an issued policy in 6 days so you’d be relying on provisional coverage anyway. That is if that’s typically part of policies where you’re at. It’s where a policy is essentially in effect once you apply and pay a premium as long as you would have gotten approved in underwriting. It’s not a great thing to rely on but that’s where you’re at with 6 days.

For term insurance there’s really not a lot of cost to you for dropping a policy soon after getting it so one option as you said is just get something in place, pay it monthly until you find a better policy that meets your needs better and then switch policies. There’s no need to make it a short term policy. Just take your best guess at the policy that would meet your needs and get that in place.

Of course as you’ve learned, this is one of the many reasons that having your own policy is almost always better than relying on coverage through an employer.

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Typically, life insurance provided as a employee benefit is dependent on your salary (sometimes as much as 2 or 3 times annual salary is available) with an option to buy more life insurance (how much is often tied to salary too) at group rates. In any case, the total amount of life insurance the OP should have as a sole earner with a young child (and presumably spouse) is much larger than the maximum available through the employer. A 20-year term life policy (or a term life policy for a shorter term as long as it is guaranteed to be renewable without medical exam) is what the OP should be looking for. The open market is one possibility, but contacting one's auto insurance carrier or home-owner/renter insurance carrier or even one's professional association (many of which offer term life insurance at group rates to their members) is also a good idea.

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Should I be looking for a policy specifically tailored for my situation, or should I just buy a 5/10 year term life policy, and cancel it when I have found a more permanent solution?

The issue you are facing is you need a policy quickly, but you don't need it for long.

I fear that trying to find one quickly and having if active will be tough.

If you do go forward with the plan: apply today for a plan with a term of X years, get the provisional coverage, and then drop the coverage when the one through your new company kicks in; you have to consider a few things.

  • The higher the value, the more likely you will need a full physical exam. This will delay the actual start date, but it won't delay the start of the provisional coverage.
  • In some cases the provisional coverage isn't 100% of the coverage you are purchasing.
  • The longer the term, the higher the first year of coverage for policies with a level premium. If you go with a level premium, and you have a choice of two term lengths the shorter one will be cheaper.
  • if the results of the physical aren't good the term policy cost could be higher than the original quote.
  • Generally you can stop a term policy at any time, but check to make sure there isn't a penalty for cancelling it in the first year.

The term length brings up an interesting point. If the plan is to drop the policy in a few months then the shortest term makes the most sense. If the plan is to keep it for the entire term then the longer terms make more sense, with the caveat the estimating your insurance needs for the next 20 years is very hard to do.

The best plan may be to purchase a 10 year term policy with an amount that will cover your needs. Then wait until you know how much the insurance will cost through your employer, and based on that cost decide which one works for you. Keeping in mind that the 10 year term price is locked in, but the cost of the one from the employer can grow each year because of inflation and because you will move from one age group to another. Also some employer plans do require a physical.

I used to use the employer plan to augment my term insurance, but I eventually realized that I was better off with the correct sized term instead of worrying about losing some or all of my coverage when I changed jobs.

the best place to start is the current insurance company you use for your auto or home insurance. They generally respond quicker for the initial meeting, and they frequently offer a discount for multiple policy lines.

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To answer the root question, I have never seen any kind of of "short-term" life insurance.

It sounds like you are reliant on whatever life insurance your employer provides for free (or perhaps supplemental group coverage). I would instead shop around for insurance on your own at your age. With a young son, I would get quotes for 20-year term life insurance. That should get you closer to both a retirement age (at which time you could be self-insured) and an age at which time your son is no longer dependent on your income for living expenses. It may be a little more expensive than coverage offered by your employer, but the reason for that is because it will last for 20 years even if you switch jobs. The next time you switch jobs you might find that insurance is drastically more expensive, so locking in a policy now will likely benefit you in the long run.

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A quick internet search tells me that regular term insurance takes about 4-6 weeks to get in place. By that time you'll be back at work.

But there is also a kind of insurance which you can sometimes called "no medical" or "no med" get that, as you might guess, doesn't require medical underwriting. From what I read it can be in place as soon as 24 hours up to 10 days after applying. I'm sure it's much more expensive and is only available in lower amounts. I don't know if they have thought of people using it for a very short term like you. But you might be able pay for the first year and then cancel.

As with the other answers, I highly recommend getting an independent, 20 year term policy. In addition to the issue you are facing now of gaps in coverage, most workplace policies are nowhere near enough coverage for a breadwinner like yourself.

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