Insurance is something everyone should know a fair amount about. It’s not just for homeowners and vehicle owners. Some insurance terms can be confusing and there’s a lot to learn about what these terms mean.
One of the top searched questions for this industry is, “What is the difference between long term and short term insurance?”
We’re going to try and make this easy to understand and remember, to help make your life simpler.
So without further ado let’s get into it…
In general, insurance is divided into two categories; long term insurance and short term insurance. So what’s the difference? Let’s take a look.
What is long term insurance?
Long term insurance refers to insurance directly related to people and life-changing events. Put simply, long term insurance is for retirement, death, and disability.
The way this works is you pay a monthly premium to an insurance provider in order to receive a large sum of money in case of a life-changing event such as retirement, disability or death (funeral cover). This means you and your family are covered financially when you need it most.
What is short term insurance?
Short term insurance is quite different from long term insurance. Instead of covering real-life risks, it’s specifically created to insure possessions such as your car, home etc.
A common misconception about short term insurance is that if you’re, for example, paying a premium on a house for 30 years, doesn’t that make it a long term insurance policy? Well no, it doesn’t. Many people get these terms mixed up because each insurance provider has different offers and sometimes, a different way of wording things too.
Despite the way it sounds, long term and short term insurance policies are not always about the length of time. Rather, the defining difference between the two is long term insurance covers life and people and short term insurance covers objects and possessions.
We hope that this article has cleared up any confusion for you and you now understand what you are or will be paying for.
Do your research if needed and ask the insurance provider any questions you have to clear up uncertainties. No one ever wants to end up paying for something they didn’t intend to and don’t completely understand. Are you ready to find the best insurance deals for you? Contact Quality Quote to get a comparative quote to save on your insurance.