Instant Hotspot is a lot like Personal Hotspot with one big difference: you don't have to configure anything or enter a password to connect to it. It’s “instant.”
Enabling Instant Hotspot is also extremely easy. If you've connected to personal hotspots before, you already know how to work this thing. For those of you who are looking for some info on connecting to Instant Hotspot, here's how:
Important: Your carrier should let you use personal hotspots in order for Instant Hotspot to work. If your plan doesn't feature personal hotspot, you won’t be able to enable/use Instant Hotspot.
How to Enable Personal Hotspot on iPhone/iPad Running iOS 8:
Step #1. Make sure that in all the devices, you are logged in to the same iCloud account. (Settings → iCloud). This is important.
Step #2. Next up, on your iPhone/iPad (which will act as the hotspot) open Settings
Step #3. Tap on Personal Hotspot (if you don't see this option after data is enabled, you should contact your carrier).
Step #4. Turn on the switch for Personal Hotspot.
That’s about it.
How to Use Personal Hotspot on Yosemite:
Now, on the device you want to connect to, check Wi-Fi sources. (On an iDevice, you go to Settings -> Wi-Fi; on a Mac, click on the Wi-fi icon from the task bar and you should see your iPhone/iPad listed).
You won’t be asked for a password when you connect to this device. That’s the major change – no more setting up and entering passwords to connect to a hotspot iPhone/iPad that has the same iCloud account.
Apple uses your iCloud account as verification that it’s okay to connect to this hotspot without a password. Naturally, that’s why you need to be logged in to the same iCloud account on both the devices.
But remember that all this is possible only when your carrier lets you use Personal Hotspot. Some carriers disable this feature by default, requiring customers to change plans or cough up more to enable Personal Hotspot.
Using personal hotspot / instant hotspot will use up more battery on your iDevice.