Annual Renewable Term Insurance

Annual renewable term insurance

See: Term insurance.

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Annual Renewable Term Insurance

An insurance policy in which the insurer guarantees the policyholder will be insurable for a set number of years (often 10 to 30), but premiums are only guaranteed for a year at a time. That is, the insurer may raise premiums each year even though it may not cancel the policy for the stated number of years. Annual renewable term insurance is usually less beneficial for the policyholder than for the insurer.

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Annual renewable term insurance. If your term life insurance is an annual renewable policy, you can renew your coverage each year without filling out a new application or passing a physical exam.

However, the premium, or the amount you pay for the policy, isn't fixed, and goes up each time you renew. Policies with five- or ten-year terms may also be renewable, with comparable increases in their premiums.