What is One Year Term Life Insurance?
It’s a One Year Renewable Term Life Insurance Policy that provides you with life insurance protection for one year with the option to renew your policy for another year when it expires.
This type of term life insurance policy is sometimes called a yearly renewable term or an annual renewable term life insurance policy.
Based upon the name, the term life insurance policy lasts one year, however it can be renewed.
A good thing about this term life insurance is that after the term life insurance policy expires, if the insured (or policy owner) decides to renew the term life insurance policy, the insured does not have to re-qualify.
This is considered a renewal of the term life insurance policy "Without Evidence of Insurability". This means you don’t have to take a medical exam to renew your coverage.
The term life insurance policy will state how many times it can be renewed, or up to which age it can be renewed.
Therefore, there is always an option to extend the term life insurance coverage regardless of your health, or hazardous hobbies or occupations.
The death benefit on a one year term life insurance policy stays the same during the one year duration.
Also, the death benefit stays the same even after the term life insurance policy is renewed.
However, the premium increases each time the term life insurance policy is renewed, and the increase is more and more as the term life insurance coverage is continued.
The reason for the increase in premium each year is because as the term life insurance policy is extended, the age of the insured goes up, and ultimately, death rates increase with advancing age. The older you get, the shorter your life expectancy.
There is no savings component (no cash value) to a one year term life insurance policy. The amount of protection in this term life insurance policy is equal to the death benefit, which is also called the "Face Amount" of the life insurance policy.
Annual Renewable Term Life Insurance offers you the option to annually renew your term insurance policy each year up to a specific age limit.
The chances of your dying increase statistically the older you get. That means your premiums will increase each year as you renew your term life insurance policy.
Level Term Life Insurance may be a better option if you want premiums and coverage that remain level for 10, 15, 20 or 30 years.
If you buy your term life insurance policy when you are young and unlikely to die, you can usually get a large amount of life insurance coverage for an affordable premium.
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