What Is Annual Renewable Term Life Insurance, and Who Should Buy It?

ART life insurance is a type of term life insurance that provides coverage for one year at a time. You can renew your policy annually without taking a new medical exam, which means you'll keep your coverage even if your health changes.

The key difference between ART and other term policies lies in how premiums work. Level term insurance locks in your rate for the entire term (whether that's 10, 20 or 30 years). With ART policies, your premiums increase each year as you age and the insurance company's risk grows.

ART life insurance works simply: you get one year of coverage, then decide whether to renew for another year. You won't need a new medical exam when you renew, which helps if your health has changed since you first bought the policy.

Your premiums get recalculated each year based on your current age. Since older people are statistically more likely to die, insurance companies charge higher rates as you age. This lets insurers adjust their risk without making you apply for an entirely new policy.

ART policies start cheaper than longer-term policies because insurers face less risk in the short term. But your premiums aren't locked in and will go up every year when you renew.

Your age is the main factor driving these increases. As you get older, your risk of death naturally rises, so insurance companies charge more. This means ART can save you money initially, but it gets more expensive over time, especially if your health deteriorates.

You'll want to review your coverage regularly to make sure ART still makes financial sense for your situation.

You decide whether to renew your ART policy each year. Here's how the process works:

• Automatic Renewal: Most ART policies renew automatically unless you cancel.
• Premium Changes: Your rate gets recalculated based on your new age. If your health has declined, your premium may increase even more.
• No Medical Exam: You won't need another medical exam to renew, even if your health has changed since you first applied.
• Review Your Terms: Check your renewal notice each year for any changes to coverage limits, maximum renewal age, or other policy conditions.
• Confirm Payment: Make sure your premium payment goes through to avoid a lapse in coverage.

ART life insurance offers specific benefits and drawbacks worth weighing against your financial goals and timeline.

ART life insurance works best when you need flexible, short-term coverage without locking into long-term premium commitments.

• You need short-term coverage: You're covering a debt that will be paid off soon or supporting your family through a specific life stage.
• Your health might improve: You're recovering from an illness or plan to quit smoking, which could lower your rates in future years.
• You're in transition: You're between jobs, starting a business, or expect your insurance needs to change soon.
• You have a temporary high-risk job: Your current occupation is dangerous, but you plan to switch to something safer.

• You need long-term coverage: If you want life insurance for decades, ART's rising premiums will likely cost more than a level-term policy.
• You're on a tight budget: Rising annual premiums could strain your finances, especially if you're on a fixed income.
• Your health is stable or declining: You're better off locking in current rates with a traditional term policy instead of facing annual increases.
• You're older: Most ART policies become expensive or unavailable as you approach retirement age.

Shopping around helps you find the best ART rates and compare what different insurers offer. Use our life insurance cost calculator below to get quotes quickly.

ART life insurance isn't right for everyone, especially if you need long-term coverage. Here are other options that might work better for your situation.

• Level Term Life Insurance: Locks in your premium for the entire term (10, 20 or 30 years). You'll pay the same rate throughout, making it cheaper than ART if you need coverage for several years.
• Decreasing Term Life Insurance: The death benefit shrinks over time to match your declining debt, like a mortgage balance. This costs less than level term since the payout decreases each year.

• Whole Life Insurance: Combines lifelong coverage with a savings account that grows at a guaranteed rate. Your premiums stay the same, and you can borrow against the cash value if needed.
• Universal Life Insurance: Gives you more control over your premiums and death benefit than whole life. You can adjust both up or down as your financial situation changes.

• Long-term planning: You want lifelong coverage plus an investment that builds cash value you can borrow against later.
• Estate planning: You need to leave money for heirs or cover estate taxes to protect your family's inheritance.
• Changing income: Your earnings fluctuate, so you want the flexibility to adjust premiums and coverage as needed.

Choosing between term and permanent type of life insurance depends on your budget, age, health, and whether you want an investment component. Most people start with term insurance since it's cheaper, then consider permanent options as their financial situation improves.

Annual renewable term (ART) life insurance works well when you need flexible coverage that can adapt to changing circumstances. You can renew your policy each year without taking a medical exam, which keeps your coverage active even if your health changes.

ART makes the most sense during transitional periods, like starting a family, changing careers, or covering temporary debts. If you only need coverage for a few years, ART's lower initial costs can save you money compared to longer-term policies.

Here are answers to common questions about ART life insurance.

Why Trust MoneyGeek? We analyzed 1,488 life insurance quotes alongside customer satisfaction ratings, financial stability reports, product offerings and more to determine the best life insurance companies for a variety of needs.

Recency
Coverage costs and company information for life insurance providers were updated in 2025.

Methodology

MoneyGeek created a scoring system to compare life insurance companies across five categories and ranked them based on their scores. We chose to review these companies based on their broad national coverage and ability to provide an online quote.

MoneyGeek's Scoring System

In our scoring system, companies can earn up to five points in each category. We then use these category scores to calculate an overall MoneyGeek score out of 100. We applied the following weightings to score insurers:

• Affordability: 30%
• Financial Stability: 25%
• Buying Process: 20%
• Customer Satisfaction: 15%
• Product Diversity: 10%

Each company's score incorporates the following:

• Cost data obtained through online quotes
• Financial strength ratings from AM Best and number of years in business
• Customer satisfaction data from the National Association of Insurance Commissioners (NAIC) customer complaint index (we reviewed annual complaint data from 2020 to 2022, the most recent year available)
• Availability of tools to aid in the buying process, such as online product materials and multiple payment options
• Diversity of life insurance products offered

Sample Customer Profile

MoneyGeek used a standard profile to obtain life insurance quotes:

• 40-year-old male
• Nonsmoker
• 5 feet 11 inches tall and 175 pounds
• Excellent health rating

Premiums are based on the standard profile unless otherwise noted.

We modified the profile by age, gender, height, weight, tobacco use, health rating and geographic location to collect a variety of quotes and determine the best life insurance company for several types of customers. We also collected quotes for term life insurance with varying term lengths and coverage amounts.

We identified trends in the data set and used those patterns to calculate projections and extend the data beyond what was initially collected.