A renewable term life insurance policy is a type of term life insurance that gives 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. That said, coverage continuation is subject to premium payment and policy terms.

The key difference between annual renewable term (ART) life insurance 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.

Understanding how ART life insurance works can help you decide if it fits your financial strategy. The process is straightforward: you get one year of coverage, then decide whether to renew for another year. This gives you control over your coverage decisions year by year.

You won't need a new medical exam, 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.

The premium for a renewable term life insurance policy starts 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 insurers 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 renewable term policies include automatic renewal clauses that continue coverage unless you actively cancel. The insurer calculates new premiums based on attained age pricing, using mortality tables that reflect your current age rather than your original issue age. This mechanism protects your insurability even if you develop health conditions that would make you uninsurable in the traditional market.
• Premium Changes: Your renewal premium reflects two primary factors: age-based mortality risk and any policy-specific rate adjustments. Unlike level term policies that spread mortality costs across multiple years, renewable term policies price each year individually. Insurers use current mortality tables and may apply portfolio adjustments based on their claims experience, though your specific health changes don't affect renewal pricing due to the guaranteed renewal provision.
• 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. Pay attention to maximum renewal age provisions and conversion opportunities that may expire as you age.
• Confirm Payment: Make sure your premium payment goes through to avoid a lapse in coverage. Most insurers provide 30-day grace periods, but missed payments can terminate your renewable rights permanently.

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

Choosing the right life insurance can feel overwhelming, especially when you're not sure how long you'll need coverage. Annual renewable term life insurance provides flexible coverage that adapts to changing personal and business circumstances. This policy type works best when you need temporary protection with the ability to adjust coverage as your situation evolves.

You can add riders to your renewable term life insurance for extra protection. Riders are add-ons that expand what your policy covers or how it works.

Popular options include accelerated death benefits or waiver of premium, which can make your policy more valuable but will cost extra. Make sure you can afford the higher premiums long-term before adding riders.

• Accelerated Death Benefit Rider: This rider allows you to access a portion of your death benefit while living if diagnosed with a terminal illness. You can typically access 25% to 100% of your death benefit, depending on your prognosis and insurer guidelines. The remaining death benefit passes to your beneficiaries upon death. Requirements include medical certification of terminal illness with a life expectancy of 12 to 24 months.
• Waiver of Premium Rider: This rider continues your life insurance coverage without premium payments if you become totally disabled. The rider activates after a waiting period, usually 90 to 180 days from disability onset. You must typically be under age 60 when the disability occurs, and the waiver continues until age 65. Most insurers require medical documentation proving that total disability prevents you from working in your occupation.
• Child Term Rider: This rider offers temporary coverage for dependent children, typically offering coverage amounts between $10,000 and $25,000 per child. The rider covers all eligible children under one premium, regardless of how many children you have. Coverage usually continues until the child reaches age 25, at which point they can often convert to their own individual policy without medical underwriting.
• Accidental Death Rider: This rider doubles your death benefit if death results from an accident, providing additional financial protection for unexpected, tragic events. The rider typically defines specific circumstances that qualify as accidents and may exclude certain activities like extreme sports or military combat. Coverage usually applies 24 hours a day, worldwide, for qualifying accidental deaths.

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. Depending on your situation, you might want to consider these alternatives instead.

• 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 a 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.

Renewable term 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.

Annual renewable term (ART) life insurance 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.

Renewable term life insurance automatically renews each year without requiring new medical exams, but premiums increase annually based on your age. We examined how this coverage type works, including its key features like guaranteed renewability, premium escalation patterns, and conversion options to permanent life insurance. Our analysis helps you understand whether renewable term's flexibility and initial affordability outweigh the certainty of rising costs, especially compared to level term policies that lock in rates for 10, 20, or 30 years.

Beyond explaining renewable term life insurance, we conducted a comprehensive analysis to identify the top life insurance companies across the industry. This research ensures you can find quality coverage regardless of which policy type best fits your needs.

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.

MoneyGeek's Scoring System

We 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.

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%

What We Analyzed

Each company's score incorporates the following:

• Cost data obtained through online quotes
• Financial strength ratings from AM Best and the number of years in business
• Customer satisfaction data from the National Association of Insurance Commissioners (NAIC) customer complaint index
• 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 9 inches tall and 160 pounds
• Average 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 dataset and used those patterns to calculate projections and extend the data beyond what was initially collected.