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Is short term insurance a good business? Well, it depends on your needs. Short term health insurance is obviously not the way to go for career professionals who need long term insurance, so let’s consider who benefits most from this industry.

Short term health insurance is most commonly used by individuals who are between jobs, employees who are newly hired and not yet eligible for the company health care plan, recent college graduates who are not yet employed but are no longer eligible for their parents’ health care plan, people waiting to qualify for a standard health insurance policy (which are known to take some time in preparing), those who have lost dependent status (which primarily refers to recent college graduates), and people who are on strike, have been recently discharged from the military, and early retirees. In general, if you have recently lost your policy or are simply ineligible for a new one for a short period of time, your best (and only) option is short term insurance.

A good business will usually provide you with excellent coverage, often providing full coverage for emergency room visits, prescription drugs and any number of other useful features. Short term health insurance tends to have a very wide variety of kinds of plans, ranging from minimal coverage to extensive. The policy acts like an indemnity plan, giving you the liberty to go to any specialist or doctor that you like; they are not managed through an HMO, in other words. Most plans, however, do require pre-certification so that they can reimburse you for hospital bills. Many policies are renewable from as many as 36 to as few as 6 months.

If you are still wondering “is short term insurance a good business,” you should know that one of the perks of this industry is the low premiums. Because short term health insurance policy holders tend to be much less expensive to their insurance companies, they often come with lower price tags. Most short-term insurance consumers tend to prefer lower premiums and higher deductibles, so you will likely be paying less out of pocket than your company would pay for you from your paycheck.

This Business article was written by Mark Karavan on 11/26/2009