what is a yearly renewable term yrt 
yearly renewable term is a one year temporary life insurance policy that automatically continues each year at the same death benefit when someone buys a yrt insurance policy the premium quoted is for one year of coverage based on the insured s current age premiums then increase annually to cover the increased risk of death as the insured ages while keeping their policy in force understanding yearly renewable terms yrts yearly renewable term life insurance or yrt provides one year of insurance that pays a tax free death benefit to the policy s beneficiaries if the insured dies during that 12 month period each year unless the policy owner cancels the coverage or stops paying premiums the yrt renews at the same death benefit but charges a higher premium that reflects the insured s higher age this type of life insurance is also called increasing premium term insurance or annual renewal term insurance 1actuaries at insurance companies determine what premium to charge for a renewable term policy based on different risk variables using specific formulas that consider age health and other factors actuaries can predict the likelihood a policyholder will die at a given age renewable term policies allow the policyholder to renew coverage each year without additional medical underwriting over a given period of time yrt essentially actually functions as a series of one year term policies that levy a new premium each year based on the insured s current age yrt policies tend to be attractive to young insurance seekers who want to start out with a low cost flexible premium to meet their current needs yrts also fill niche short term demands such as for those awaiting insurance coverage while changing jobs people who recently quit smoking those with short term medical conditions and others who might only need one to two years of coverage the primary drawback of yearly renewable term life insurance is that if a policyholder renews for many years they could end up paying more in premiums than if they d started out buying a level term life or permanent life insurance policy if someone buys a yrt policy and later realizes their coverage needs will last longer the insurance company may let a policyholder convert the policy to whole life insurance without taking another medical exam 2