What is Yearly Renewable Term (YRT)?
Definition of Yearly Renewable Term
Annual renewable term or yearly renewable term is a life insurance policy which offers a protection for one year and renews automatically at a premium each year.
Explanation of Yearly Renewable Term (YRT)
Following are some of the key advantages of YRT.
- Most inexpensive type of life insurance for a time period less than a year (short-term).
- Offers a Conversion Option for a particular number of years.
- Beneficial for new business people and consumers who need a short-term loan paid-off.
- Beneficial for some college students, newlyweds, or young adults who do not have abundant funds. YRT provides less expensive life insurance coverage to them.
In addition to advantages, YRT have several disadvantages which are listed below:
- Premium increases every year.
- Least expensive type of life-insurance for only for short-tram. For medium or long term it is the most expensive type of life insurance.
- If the insured is seriously ill and they become uninsurable, they would not be able to change insurance plans.
- The conversation option is only valid for few years mostly first ten years.