Annual renewable term insurance

Annual renewable term insurance

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
58 rate or the insuring company's published annual renewable term insurance rate.
Thus, annual renewable term insurance is likely to be the optimum choice for time horizons of only a few years.(7) For longer expected holding periods, prospective universal life insurance policyholders should seek a policy that has low expenses and then select, from the low-cost companies, the policy likely to provide the highest interest rate.
1 Corbett and Nelson (1992) show that mortality and expense charges within universal life insurance policies generally are higher than annual renewable term insurance premiums charged by the same companies.
They constructed an unbundled alternative to universal life comprised of annual renewable term insurance and an investment fund.
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