Annually Renewable Term Policy

Are you looking for an Annually Renewable Term Policy?

If so, you may want to learn how it works first, in order to decide if it is right for you and your life insurance needs. 

An annual renewable term life insurance policy provides life insurance protection for a "term" or period of one year.

When the year ends, you may choose to “renew” your policy for another 1 year term.

You will be charged a higher premium for the renewal period, but will not have to take a medical exam to qualify for coverage.

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Annual Renewable Term Insurance – Pros and Cons

 

If your need for life insurance is just for 1 or 2 years, this may be the best option for you. 

However, if you need life insurance for 3 to 5 years, or more, you may want to consider buying a level term life policy.

Level term life insurance offers you life insurance for a term of 10, 15, 20 or 30 years.

Your premiums are flat, meaning they do not increase during the duration of your life insurance policy. The amount of life insurance provided by your policy stays the same each year throughout the entire term of your policy.

You may cancel your level term policy at anytime, if for instance, you no longer need the life insurance protection. So, if your need for life insurance is 5 years, you could buy a 10 year level term policy, and cancel it after 5 years.

An annual renewable term life policy may be very affordable for one or two years, but if you need it for several years, the premiums may get quite expensive.

That’s why it’s so important to really understand your life insurance needs, and choose the right “term” for your coverage.  Also, your needs may change over time, and having a guaranteed level rate for 10 years or more may work to your advantage in the long run.

  

Annually Renewable Term Policy

 

Advantages:

  • Low Premiums for first year you are insured
  • Flexibility to choose how long you have coverage

 

Drawbacks: 

  • Much higher premiums after a few years
  • No Rate Guarantee – Premiums continue to rise each year

 

Term Life Insurance Quotes

 

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