Renewable Term Insurance

Renewable Term Insurance allows the insurance policy to be extended beyond the set term without reassessment of the policy conditions. Normally an insurance company will offer you this option if you have reliably paid premiums within the previous term. As you get older, the risk to the insurer increases as your health and life expectancy deteriorates. Therefore, to continue to be eligible for a large sum assured (the money paid to your survivors in the event of your death) you will be required to pay higher premiums. By taking out renewable term insurance, you do not have to be reassessed at the end of the term, and so any adverse health issues will not affect your premiums, although your age may be taken into account. For this advantage, it is common that renewable term insurance is more expensive than conventional, level term insurance.