Renewable Term Life Insurance

• Allows policyholders to extend coverage without another medical exam.
• Premiums increase at each renewal based on your age.
• Offers flexibility if you need coverage for a limited time or if your health has changed.
• Not meant as a long-term solution, since costs eventually outweigh the benefits.

Renewable term life insurance is a type of policy that lets you extend coverage beyond the original term without a new medical exam. While the most common version is annually renewable term (ART), where coverage renews year by year, some insurance companies also allow multi-year renewals, such as every 5 or 10 years. In all cases, premiums increase at renewal because they’re based on your current age, not your original rate.

This kind of life insurance coverage is most often a built-in feature of level term policies. When your original term ends (typically 10, 20, or 30 years), the renewable clause lets you extend coverage without a new medical exam. This option can be valuable if your health has changed and you can’t qualify for new affordable coverage, or if you only need coverage for a few more years.

Premiums increase with each renewal, since they’re recalculated based on your age. That makes this kind of policy more of a short-term safety net rather than a long-term strategy.

How Does it Differ From a Level Term Policy?         

A level term policy locks in your premium for the entire term (typically between 10-30 years) so costs don’t change until the policy expires. The renewable feature allows extensions after that point, but premiums rise at each renewal, which makes it less predictable for long-term planning.

How Long Can I Keep Renewing a Policy?

It depends on the insurance company, but most policies allow extensions up to a maximum age, often 70 or 80. After that, coverage usually ends. Renewals don’t require a medical exam, but premiums get progressively higher with each extension.

Read: Best Life Insurance with a Pre-Existing Condition

A renewable term life policy is mainly a backup option for people who reach the end of a level term policy but still need coverage. It works best for:

• Individuals whose health has changed and who may not qualify for new affordable coverage.
• People who only need a short extension of coverage, such as bridging to retirement or until debts are paid off, or until children are grown and out on their own.
• Families who want temporary protection but aren’t ready to buy a new policy.

Because costs rise sharply with each renewal, this is rarely the best long-term solution, but can buy time when you need it most.

Renewable term life insurance can provide a safety net, but it’s not always the best option. Here’s a quick comparison of pros and cons.

A renewable term insurance policy isn’t intended as a long-term strategy, but it can be useful in specific situations. It may be worth considering if:

• You’re reaching the end of a level term policy and still need coverage
• Health changes make qualifying for a new policy difficult
• You only need protection for a short number of years until major financial responsibilities have ended

Read: Difference between Term Life & Whole Life Insurance

A Real-Life Scenario

Lisa is a 44-year-old high school teacher and single mom. She buys a 20-year level term life policy to cover her income, college tuition for her daughter, and her mortgage through her planned retirement at 62. 

Fifteen years later, Lisa is diagnosed with breast cancer but is successfully treated and is now cancer-free. She knows this health history could make new coverage hard to get, so she uses the renewable feature when her policy ends. With three years left on her mortgage, the renewal allows her to keep protection in place, giving her peace of mind until she can fully rely on her retirement savings.

It’s easy to confuse renewable and convertible types of term coverage, but these types of term life serve different purposes.

• Renewable term life insurance lets you extend your existing coverage without a new medical exam, usually year by year or in short blocks. Premiums rise with each renewal because they’re based on your current age.
• Convertible term life insurance allows you to convert your term policy to a permanent policy, such as whole life or universal life, without new underwriting. Premium payments increase because permanent insurance costs more, but you lock in lifetime insurance protection.

Some policies include both features, giving you the flexibility to either renew for short-term coverage or convert to permanent coverage if your needs change.

Read: Who Needs Life Insurance

What Happens at the End of the Policy?

When a renewable term life insurance policy reaches the end of its allowed renewal period, often age 70 or 80, the coverage stops. At that point, you no longer have the option to renew the policy.

For many people, this timing lines up with a new stage of life. By then, major debts like a mortgage may be paid off and children are financially independent. Instead of keeping a renewable policy with a large death benefit and high premiums, some choose a smaller whole life insurance policy designed to cover final expenses. These are permanent life insurance policies designed to cover funeral costs and other end-of-life expenses.

This coverage can be a valuable safety net when your level term coverage ends, but it’s rarely the best long-term plan. Because premiums rise with every renewal, most people use it only as a short-term bridge. If you’re considering life insurance options, Ethos makes it simple to explore affordable term policies designed for lasting protection.