Annual Renewable Term Insurance

Annual Renewable Term Insurance (ATR) is tailored for short-term coverage needs. It offers protection for one year at a time, with the option to renew the policy annually, typically without requiring a medical exam or proof of insurability. Keep reading to learn more about the features and details of this type of policy.

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What is Annual Renewable Term Insurance?

Annual Renewable Term Insurance is a type of life insurance that covers you for one year at a time, with the option to renew it every year. It’s a flexible choice for those who prefer short-term coverage without being locked into a long-term commitment.

How Does an Annual Renewable Term Insurance Work?

Annual Renewable Term Insurance works by providing coverage for a one-year term. At the end of each year, you can renew the policy, but the premium increases as you age. This type of policy is ideal for people who need temporary life insurance coverage.

Example:

You are a 30-year-old professional who takes out an Annual Renewable Term Insurance policy. Your premium for the first year might be ₹6,000. When you renew the policy at the end of the year, your premium will increase due to your age — say it goes up to ₹7,000 for the second year. The following year, at 32, it could increase again to ₹8,000, and so on.

The premium increases each year, but the coverage amount (death benefit) stays the same. While it starts more affordable, the overall cost could increase, especially as you age.

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@ Starting from ₹ 12/day⁺

Benefits of Annual Renewable Term Insurance

Low Starting Cost: Great for young people who initially want affordable life insurance.
Easy Renewals: No need to reapply or undergo medical tests when renewing.
Short-Term Coverage: Ideal if you only need insurance for a short period, like covering a loan.

Key Features of Annual Renewable Term Insurance

Coverage Period: One year at a time, renewable annually.
Premiums: Start lower but increase each year as you get older.
Flexibility: You can renew the policy yearly without needing a medical exam.
Death Benefit: Remains constant, providing a fixed payout if you pass away during the policy year.

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Who Should Consider Annual Renewable Term Insurance?

Annual Renewable Term Insurance can be a great option for some individuals, but it may not suit everyone. Here's a breakdown of when it might be right for you:

Individuals	Why Annual Renewable Term Insurance Works
Young Individuals (20s and 30s)	The initial premium is low, making it affordable as you start your career.
People with Short-Term Financial Needs	Ideal for covering short-term financial obligations like loans.
People Without Dependents	If you don’t have a family to support, you might only need coverage for a short period.
Individuals Looking for Flexibility	Perfect for those who don’t want to commit to long-term coverage.

Comparison: Annual Renewable Term Insurance vs. Regular Term Insurance

Feature	Annual Renewable Term Insurance	Regular Term Insurance
Coverage Duration	1 year (renewable annually)	10, 20, or 30 years
Premiums	Increase each year	Fixed throughout the term
Initial Premium	Lower	Higher
Flexibility	High (renew each year)	Lower (fixed term)
Long-term Cost	High (due to rising premiums)	Predictable and more affordable long-term

Things to Consider Before Buying Annual Renewable Term Insurance

Your Future Needs: If you need coverage for a longer time, the rising premiums may not be suitable.
Health Considerations: Renewals don’t require a medical exam, but the increasing cost is something to keep in mind as you age.
Affordability Over Time: Although it starts with low premiums, think about how much you’ll be paying after several years of renewals.

Final Thoughts

Annual Renewable Term Insurance is a flexible option for short-term life insurance needs. It’s a good fit if you’re looking for temporary coverage or want to keep your options open. However, it’s important to consider how increasing premiums will affect your budget in the long run.

If you’re unsure which type of life insurance is best for you, talking to a financial advisor can help you determine the right option for your situation.

FAQ's

How much will my premium increase each year?

Ans: The increase depends on your age and the insurer’s rates. On average, premiums will rise around 5% to 10% annually as you age.
Can I cancel my policy anytime?

Ans: Yes, you can cancel your Annual Renewable Term Insurance policy anytime. However, you will not receive any premiums back if you cancel.
Do I need to take a medical exam to renew my policy?

Ans: No, you don’t need to take a medical exam to renew the policy, which is convenient. However, the premium increases based on your age.
Is the death benefit the same every year?

Ans: Yes, the death benefit remains the same throughout the policy's term, regardless of premium increases.
What happens if I stop renewing the policy?

Ans: If you choose not to renew, the coverage will end, and you will no longer be protected under the policy. Evaluating your and your family’s financial needs each year is important.
Can I switch to another type of insurance policy after a few years?

Ans: Yes, you can switch to another policy, like a level-term policy, if you prefer long-term stability. However, you may have to undergo a medical exam or face higher premiums due to your age.
Is it better than a whole life insurance policy?

Ans: It depends on your needs. Whole life insurance provides coverage for life, whereas Annual Renewable Term Insurance is more affordable but only covers you for a short period with rising premiums. If you need long-term protection, a whole life policy may be a better choice.
What are the benefits of term life insurance?
Ans: Here are 4 common benefits of term life insurance:
- Low premium rates
- Tax Benefits
- Death Benefit
- Long term coverage

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˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. ₹361/month is the starting price for a ₹1 crore loan cover with an 8% interest rate for an 18-year-old male, non-smoker, with no pre-existing diseases, loan tenure up to 20 years, rounded off to the nearest 10

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881

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Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.

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