Sahil Singh Kathait
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Sahil

Sahil Singh Kathait

Health & Term Insurance

A boy-in-squares bagging escapades of switching streets in groove & sensing musical airy-notes from 6 1". Under wayed nyctophile sketching the walls of life from the panorama of anime.

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Reviewed By:
Sharan Gurve

Sharan Gurve

Term & Health Insurance

Sharan Gurve has spent over 9 years in the insurance and finance industries to gather end-to-end knowledge in health and term insurance. His in-house skill development programs and interactive workshops have worked wonders in our B2C domain.

Updated on Apr 22, 2026 4 min read

Annual Renewable Term Insurance (ART)

While life insurance products cover you for at least five years, but annual renewable-term life insurance allows you to get coverage for a shorter period i.e 1 year. You can pay the premium of the policy together for a year and then renew it after 12 months to enjoy coverage for another year.

An annual renewable policy does not require you to take a medical test every time you renew it after 12 months. The medical test is usually undergone once at the time of underwriting.

Since the premiums are paid for an entire year they are cheaper as compared to the ones that you pay on a monthly, quarterly or half-yearly basis. Also, the premiums of an ART policy increase every year as you age or as you get health issues.

Eligibility Criteria for Annual Renewable Term Insurance

The eligibility criteria for an Annual Renewable Term insurance is same as that of any term insurance policy. Following are some of the factors that you might want to consider.

  1. Age

    The age limit of buying an ART policy is 18 to 65 years. Beyond this age, the buyer is considered more vulnerable to critical health conditions.

  2. Income

    The limit for a salaried person is up to 3 lacs to 4 lacs, and the limit for a self-employed person is up to 4 lacs to 5 lacs.

How Annual Renewable Term Life Insurance Works

The annual renewable policy offers coverage for a shorter period, and you can renew your policy annually. Let’s see how it works:

  • While buying the plan, you have to lock in a specific period of insurability.
  • Throughout this period, you’re allowed to renew the policy without reapplying or taking any medical tests.
  • However, you can opt for a renewable, annually up to a specific age.
  • The premiums typically start cheaper, and with each passing year, the premiums will increase.
  • The death benefit remains constant.

How Much Does Yearly Renewable Term Insurance Cost

Here, we’ve listed the premium rates of a yearly renewable term plan for Rs. 1.5 crore cover over 30 years for a 25-year-old in excellent health.

Renewable Term PlansAnnual Premiums for MaleAnnual Premiums for Female
ICICI Prudential iProtect SmartRs. 11,470Rs. 11,316
HDFC Life Click 2 ProtectRs. 14,316Rs. 12,168
Kotak Life Kotak e-TermRs. 11,859Rs. 11,505
Edelweiss Tokio Life Zindagi ProtectRs. 12,285Rs. 11,984
Bandhan Life iTerm PrimeRs. 13,563Rs. 13,559
SBI Life eShield NextRs. 14,789Rs. 14,728

Pros and Cons of Annual Renewable Term Life Insurance

The annual renewable term insurance might have certain cons, but the number of pros is quite considerable. Still, the drawbacks may make you wonder, ‘Why should I choose an ART plan?’

To get the right answer, check out the pros and cons of annual renewable-term life insurance.

ProsCons
With annual renewable-term life insurance, you can get more flexibility as compared to other life insurance products.Typically, plans start with cheaper premiums in the early years, and they’ll increase with each passing year based on the policyholder’s age.
The premiums of annual renewable-term life insurance are typically low in the early years, making it appealing to buyers and those who need to cover a very short period.Under the ART plan, you only get cover for a very short period of time, and you’ve to renew your policy each year to continue your plan.
It is one of the simplest types of term insurance plans. Just buy, pay a premium in a lump sum, and renew the plan annually. You can also add riders to ART plans.ART policies only offer temporary coverage and are rare as compared to regular term plans.

Is Annual Renewable Term Life Right For You

Annual Renewable Term Life Insurance is an ideal option for you in case you need cover for a very short period of time or already hold an employee cover from your job. However, the main drawback of ART is that, in the long term, you could end up paying more in premiums.

Therefore, this type of plan is only recommended when you have short-term life insurance needs. Before you buy Annual Renewable Term Life Insurance, be mindful of how much premiums you’ll pay in future years, not just the first year’s premium.

Conclusion

Annual renewable-term insurance is an ideal option for you at the early stage of life when you need temporary insurance to address a short-term financial risk. Each passing year, you’ve to renew the policy, and the premiums will increase simultaneously.

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Yearly Renewable Term Insurance: FAQs

1. What is the difference between an annual renewable term and a level term?

Under a level-term plan, premiums remain constant throughout the policy tenure, and under annual renewable-term life insurance, premiums will increase with every passing year.

2. What is an annual renewable term?

An annual renewable term life policy lets you get coverage for a shorter period based on your needs.

3. What are the Benefits of the ART policy?

One of the primary benefits of the ART plan is premiums will be cheaper as compared to other life insurance products.

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