Annual Renewable Term Life Insurance
  • ART Eligibility Criteria
  • ART Policy Cost
  • Pros and Cons of ART
Annual Renewable Term Insurance
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Annual Renewable Term Life Insurance (ART): All you Need to Know About

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 Plans Annual Premiums for Male Annual Premiums for Female
ICICI Prudential iProtect Smart Rs. 11,470 Rs. 11,316
HDFC Life Click 2 Protect Rs. 14,316 Rs. 12,168
Kotak Life Kotak e-Term Rs. 11,859 Rs. 11,505
Edelweiss Tokio Life Zindagi Protect Rs. 12,285 Rs. 11,984
Aegon Life iTerm Prime Rs. 13,563 Rs. 13,559
SBI Life eShield Next Rs. 14,789 Rs. 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.

Pros Cons
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.

Term Insurance Companies

Check and compare plans from 21 IRDAI-approved term insurance providers before purchasing a term plan.


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.

Yearly Renewable Term Insurance: FAQ's

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.

4. How often can the policy be renewed?

You can renew your annual renewable term life insurance annually by contract.

5. Does annual renewable term insurance have an increasing death benefit?

With each passing year, the premiums will increase, but the death benefit and policy's face amount— remain constant.

What Our Customers Have to Say

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After getting advice from the PolicyX experts, I chose a Bandhan Life Insurance term plan. Thank you, PolicyX, for helping me buy a term plan at such a low premium.

Sahil Singh Kathait

Written By: Sahil Singh Kathait

Sahil is a passionate content writer with over two years of expertise in the insurance domain. He uses his knowledge in the field to create engaging content that the customer can relate to and understand. His passion lies in simplifying insurance terminology, ensuring a hassle-free understanding for potential policyholders. With his outstanding collaborative efforts with people, he understands different perspectives and keeps readers' viewpoints at the forefront of his content writing approach.