Yearly Renewable Term (YRT) - Life Insurance

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What Is Yearly Renewable Term (YRT) in Life Insurance?

<lingo>A Yearly Renewable Term (YRT) is a term that describes a single year life insurance policy. This is a type of term life insurance, which means it is in place for just a year. After that year, the policy ends and, if the policyholder decides, he or she can continue with another year. However, the applicant’s health, age, and other factors can play a role in costs year to year. As a one year life insurance policy, it provides individuals with just the cost associated with the covered year.</lingo>

Yearly Renewable Term (YRT) Clearly and Briefly Explained

When a person decides to purchase life insurance, he or she will likely request a quote for the policy from a life insurance provider. The provider provides a Yearly Renewable Term (YRT) as a quote for the first year. If he or she agrees to the terms, the policy goes into effect. It stays in place for a year. Then, when that year is over, the life insurance company provides another quote for another year of coverage. The applicant can decide to continue the coverage or not to do so with a new policy.


<twitter>A Yearly Renewable Term (YRT) is a term that describes a single year life insurance policy. </twitter>



What makes this type of life insurance unique is that every aspect of the policy can change from one year to the next. In nearly all situations, the premium will increase. That means it becomes more expensive to purchase the policy. As a person ages, risk increases, which drives the cost of life insurance higher. Sometimes, this type of life insurance is also called premium term insurance or, to describe the terms, it is called annual renewable term insurance.


There are various benefits to choosing a YRT. Specifically, it is less expensive for the initial year. If an individual decides they need coverage only for a year, this policy can work well to meet those goals. However, over time, renewing the policy year after year becomes very expensive. The policy still provides a death benefit and will continue to provide coverage as long as the policy’s premium is paid by the policyholder and the term is renewed.


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