Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Annual renewable term life insurance means that the premiums for a policy are not guaranteed and will increase each year (based on age) by a good margin (often a substantial increase) even though you can technically keep it going til the coverage end date (e.g. 95). In short, you likely would not keep the policy going beyond the first couple years (if at all) due to the sheer expense of the program.
When you're buying term life insurance, you want to set up a policy that features a level term guarantee (meaning you're paying the same premium for a set number of years - e.g. 10 years, 15, years, 20 years, 25 years, or 30 years). The longer the term guarantee, the better (even though it does cost more to secure a longer term guarantee, it can provide much more cost savings over time the longer you live).
If you want to guarantee the premium remain fixed and guaranteed for the rest of your life, you would want to set up a permanent insurance policy (either a universal life or whole life poilcy, depending on coverage needs).
I hope the information is helpful - please feel free to contact me for help with your coverage and if you have any other questions. Thanks very much.
That means that the policy automatically renews each year without any underwriting. Typically all term products have the annual renewable option. The pricing is dependent upon which product you choose. If you select a 20 year term policy, the premium is the same for 20 years and then the policy will automatically renew at the premium required at the age you are after 20 years. If you have a life insurance illustration from your agent, you will see what the premium is every year even after the "term" has expired.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Annual renewable term has two elements. It provides life insurance protection for one year and it promises to insure you again for a subsequent year. Most companies include the renewal rates for each policy year in the policy itself. If you know when you will die, an ART policy might be the best fit.
Annual renewable term life insurance or ART as it is known by the life insurance industry allows a person to purchase the maximum face amount at the lowest premiums. These policies automatically renew without proof of insurability every year. However, these policies have an annual increase with age. The older a person becomes the steeper the increases become.
I am in agreement with the answers above, but will add that not all Annual Renewable Term Life Insurance guarantees renewability for the following year without some health underwriting. In fact, most ART policies are only guaranteed renewable for a set number of years, which can be as short as one or three.
That is an excellent question! There are a lot of great answers above, but I'll give it to you in plain English : It's insurance speak for "We will take your money until you go broke and lose your coverage". Simply, that is what will happen. A term policy with this tag is marketed to you to make you think that it will last beyond its set term. It will, but look in your policy at the annual payment section. See how dramatically it rises? Bet after the second year it's become unaffordable, and you drop the policy... Part of the reason I do this website is because of the insurer who hooked me with one of these policies back before I understood what she was selling me, and am doing my best to keep others from being hooked like I was. There are better policies out there, I promise you, and I'd advise you to seek a second independent agent for alternatives. Thanks for asking!
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
Annual renewable term is a Term Life policy that will allow you to renew it each year without having to go through additional underwriting or medical exams. It does not guarantee that the premium will remain the same. In fact usually the illustration will show you the scheduled increases in premiums per year or per 5 years. It also does not guarantee that you can renew it every year forever! Most term policies will not allow you to renew past age 75 no matter what you are willing to pay.
.JPG){kind=avatar}
When you're buying term life insurance, you want to set up a policy that features a level term guarantee (meaning you're paying the same premium for a set number of years - e.g. 10 years, 15, years, 20 years, 25 years, or 30 years). The longer the term guarantee, the better (even though it does cost more to secure a longer term guarantee, it can provide much more cost savings over time the longer you live).
If you want to guarantee the premium remain fixed and guaranteed for the rest of your life, you would want to set up a permanent insurance policy (either a universal life or whole life poilcy, depending on coverage needs).
I hope the information is helpful - please feel free to contact me for help with your coverage and if you have any other questions. Thanks very much.