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Renewable Term Coverage

Term insurance may be ideal for you because it is less expensive, especially if you are purchasing a policy when you are young and your rates are low. However, what will happen when the policy expires? Depending on how long your policy was for, you may have difficulty finding affordable coverage after the term policy expires. If you purchased a twenty or thirty year term policy, you will be much older when it expires and insurers may be less willing to provide you with coverage.

Renewable coverage may be the answer you're looking for. You can get a renewable clause in your policy so that your rates won't go up when your policy expires. With a renewable policy, when your plan expires, you will not need to undergo another medical exam or provide proof of insurability. Since your plan is renewable, it relies on the initial exam you provided when you first purchased the policy.

Not all term policies are renewable, so you'll want to go through your policy, understand every aspect of it, and make sure that if you want to be able to renew it, you can. Also make sure you know what the rates and premiums will be after you renew the policy, as they may change slightly because you are older. Know the policy before you sign it, and know what you need to do to maintain it and renew it. Different insurance companies have different policies and procedures so make sure you know any deadlines and when you need to renew the policy by.

There are two types of renewable term policies: annual renewable term (ART) and a multi-year policy. An annual renewable term policy is set for one year, and you can renew it each year. A multi year policy can range from five years to thirty years, and you would renew it once that given number of years is up. So, for example, if you buy a five year renewable term policy, you would renew the policy after five years.

This is great for families with a history of medical conditions. You may be healthy when you purchase your policy, but you never know what may happen further down the road, and you want to be prepared for anything. Also, if you are not sure what your needs will be, or suspect that your needs may change after five or so years, you may want to purchase an annual renewable term plan or a short term (five years or so) renewable policy. For example, if you are getting married and plan on having children within the next ten years, but are not sure when, then you may want to buy an annual renewable term plan so that once you do have kids, your transition to a new policy will be easier (and you won't have to cancel on a longer set year policy this way).