Understanding Annual Renewable Term (ART) Insurance: Coverage, Renewals, and Costs

annual renewable (ART) insurance

issued for (and provides protection for) only one year, but the policyowner is permitted to renew the policy for subsequent periods to a stated age without evidence of insurabilityPremiums increase each year as the insured ages

Annual renewable term (ART) insurance is a type of life insurance that provides coverage for a set period of time, typically one year, and can be renewed each year. Unlike permanent life insurance, ART insurance does not accumulate cash value and only provides death benefit coverage.

The premiums for ART insurance policies increase each year as the insured ages. This is because the risk of death increases as the individual gets older, and the insurer is taking on more risk with each passing year. Policyholders have the option of renewing their coverage each year, but the premium will increase with each renewal.

ART insurance can be a good option for individuals who need life insurance coverage for a specific period of time, such as to cover a mortgage or child’s education expenses. It is also commonly used by businesses to provide life insurance coverage for key employees.

However, if the policyholder wants coverage that lasts beyond a specific period, or if they want an insurance policy that builds cash value, they may want to consider permanent life insurance instead of ART. Additionally, as the premiums increase each year, the overall cost of ART insurance can become quite expensive over time.

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