Annual Renewable Term

A potential purchaser deciding on the type of life insurance policy to purchase should consider whether he or she wants term life insurance or permanent life insurance. The primary difference between term and permanent policies is that permanent types may offer an investment component and have cash value, while term insurance offers only life coverage.

When you get an annual renewable term life insurance quote, you will learn that it is a type of life insurance that offers coverage for a set number of years without having to provide evidence of insurability. The coverage period usually ranges from 10 to 30 years. With this time of life insurance, a policyholder's premiums will increase over time as he or she ages.

The primary advantage of annual renewable term life insurance is its initial low-cost premium. This type of life insurance provides purchasers with the peace of mind of having coverage at affordable rates. Annual renewable term also is easy to renew, since a policyholder does not have to provide evidence of insurability each time he or she renews.

One of the disadvantages of this type of life insurance is that, while the premiums are affordable early on, the premiums go up as the policyholder ages. Also, like other forms of term insurance, annual renewable term does not build cash value like permanent life insurance.

Despite any potential drawbacks, annual renewable term life insurance rates remain an affordable option for potential purchasers who want life insurance coverage for a specified period of time.




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