Key takeaways

• • With a renewable term life insurance policy, coverage can be renewed without a medical exam when your term expires.
  • Renewable term life insurance can offer financial protections in the years before a major personal milestone, like getting married or starting a family, after which your coverage needs may change.
  • Renewability is popular among young people looking for shorter-term coverage and affordable premiums.
  • Unlike a level term life insurance policy, each time you renew (usually at the end of a year) your premium will go up based on your new age.

What is renewable term life insurance?

Term life insurance is a life insurance policy that expires at the end of a set number of years. A renewable term life insurance policy can be renewed after the term expires. The term may be as short as one year.

Typically, you can renew your policy without a repeat of a medical exam or requalification. However, the premium may go up every year or every few years as you age.

What is renewable term life insurance for?

Renewable term life insurance is designed to allow younger, healthier people to access the lowest possible premium available for their current age and health, and provide a way to maintain insurance coverage year after year.

A renewable policy is often best implemented as a short term solution. For many consumers, purchasing a 10 or 20-year policy with a fixed premium rate (a level term life insurance policy) will typically be cheaper overall.

How does renewable term life insurance work?

With a renewable term life policy, your original premium is based on your current age and health, as well as the amount of your preferred death benefit.

A renewable term clause means that you can renew the policy at the end of the term, often in one year increments. While your premium will go up based on your new age, you won’t have to undergo a new health evaluation.

When to buy a renewable term life policy

When you are young and healthy, the premium for an annual renewable term life policy will usually be lower than other policy options. This is due to the fact that the risk of you dying in your current year of life is low.

As you age, your premium will rise each time you renew. Eventually, it may make more sense to purchase a level term life policy. A level term policy of 10, 15, 20 or 30 years will lock in a set premium for a longer time. Explore level term life policies from Fidelity Life .

Benefits of a renewable term life policy

The most obvious benefit of a renewable term life policy for young, healthy people is an extremely low premium. While a level term life policy is often an affordable option, there are some cases when a renewable term policy might make sense.

Insurance While You Stop Smoking

Smokers have higher life insurance rates. If you currently smoke but are planning on stopping smoking, you might choose a renewable term life policy. You can ensure some financial protection for your loved ones while you quit.

Once you’ve been smoke-free for a prescribed number of years (usually 2-5), you can apply for a level term life insurance policy. The level term will likely come with a much better premium than you would have if you’d applied for a 10, 15, 20 or 30-year term while still smoking.

Temporary Coverage in Advance of a Job or a Marriage

If you are finishing graduate school or a professional degree and anticipate taking a job that offers life insurance, a renewable term life policy can provide a few years of coverage. Then, when you have the resources (and financial need) to pay a higher premium and replace more income, you can seek out a longer level term policy or a permanent policy.

If you are planning to get married or start a family soon, but haven’t yet, you can begin to plan your family’s financial future with a renewable term. When you marry or have a child, your life insurance needs to change substantially. A renewable term life policy can act as a bridge between early adulthood and a career or starting a family.

Keep Your Long-Term Financial Goals in Mind

A renewable term life policy could be a good policy for your immediate needs. However, the premiums will typically increase with each renewal. Your longer-term financial plan may include transitioning to a level term or permanent policy. The younger you are making this move, the more affordable your coverage is likely to be.

Level term premiums are often more affordable than people think. You may be able to secure a level term policy now and lock in financial protections for 10, 15, 20 or 30 years at a premium you can comfortably afford. Explore Fidelity Life’s term products or talk to one of our life insurance agents to learn more about your options.

Renewable term life riders

As with a level term life policy, you can enhance your renewable term life policy with various riders to increase the death benefit or protect against inability to pay premiums if desired. Learn more about life insurance riders .