What are the long risk and short risk in insurance?

Most of the insurances with an insurance term of more than one year are life insurance (including endowment insurance, term life insurance and whole life insurance, with or without dividends) and critical illness insurance.

Short term insurance:

Insurance with a term of one year or less is mostly accident insurance (of course, long-term accident insurance is not uncommon now) and medical insurance in health insurance. Because the claims experience of these products fluctuates greatly, it is convenient to adjust the rate or terminate the sales by making short-term insurance.

Extended data:

The difference between long-term insurance and short-term insurance:

First of all, security certainty.

In fact, the most important difference is that long-term insurance can be renewed compared with short-term insurance, and the guarantee rate is 100%.

Short-term insurance can guarantee renewal but not the rate, so you can "automatically" stop buying. This is not the case with long-term insurance.

Second, the difference of hesitation period.

The short-term insurance purchased for each renewal is an independent contract, so there will be a hesitation period, that is, you can choose to surrender within 10 days, and the insurance company will unconditionally refund the premium.

Long-term insurance only has a hesitation period when it is first purchased, and it cannot be surrendered free of charge after the hesitation period.

Third, the difference of waiting period.

Insurance companies usually have a "exemption period" or a "waiting period" in their terms. Insurance companies will not pay for accidents during the waiting period.

Long-term insurance is an insurance contract with a waiting period and no waiting period afterwards.

Short-term insurance will have a waiting period after each purchase. But in order to encourage the purchase of short-term insurance, most insurance companies will also set up continuous short-term insurance without waiting period.

Reference source: Baidu Encyclopedia-Long-term insurance

Reference source: Baidu Encyclopedia-Short-term insurance