Renewable Term Life Insurance

Renewable term life insurance allows policyholders to renew their policies without repeating the application process. The term of the policy may be 1 year, 5 years or even 10 years. When the policy expires at the end of the term, the insured is given the option of renewing the policy without additional proof of insurability or medical examinations.

Why Is Renewable Term Life Insurance Different?

Traditional term life insurance policies usually have terms of 5, 10 or 20 years. When the policy expires, the policyholder will have to complete a new application, submit additional medical information and undergo a physical/medical examination before a new policy will be issued. Renewable term life policies do not require the policyholder to repeat the application process, since they have the option of renewing the policy without the hassle of reapplying for the same life insurance coverage.

What Are The Advantages of Renewable Life Insurance?

If you are not sure how long you will need life insurance coverage, it may be difficult to select a term for your policy. With renewable life insurance, you may choose to select a policy for as little as one year. If at the end of the year you still need coverage, you can renew the policy without the need to reapply for coverage. This option is especially beneficial for people who are expecting financial changes in their lives, or those who need to cover short-term financial obligations.

Who Should Buy Renewable Term Life Insurance?

Business people with short term debt or business loans with personal guarantees may choose to buy a renewable term life policy to cover their obligation. If the debt is paid within the policy term, they don’t have to renew, but if it is not completely paid off, they can renew without spending additional time and effort. Renewable insurance is also a good option for individuals who are not sure how long they will need term life insurance since their financial obligations may change in a relatively short period of time. Learn more about buying term life insurance.

Flexible Term Life Insurance Coverage

While renewable term life insurance does not offer the lowest premiums, it has more flexibility than some other forms of term life. It is a great choice for people who don’t want to commit to a ten or twenty year policy but do want to avoid reapplying for life insurance each time their policy expires. It provides good short-term life insurance protection, or it can be used as a primary form of life insurance coverage.