Everything You Need to Know About Renewable Term Insurance

A renewable term plan is a regular term plan that allows renewal of an existing term plan once the policy tenure is completed, without any prequalification requirement. This means there is no need to get medical tests at the time of renewal. If you need long-term financial security with an added customisation option, go for , which includes renewable benefits.

Basically, this feature depicts that, whether buying the policy online or offline, the policy tenure can be extended without going through any regular policy processes. The premium amount for renewable plans is comparatively higher than that of regular plans, which will help the nominees in the future. This is due to health conditions being unpredictable for beneficiaries in future.

Who Should Buy a Renewable Term Plan?

Provided is the list of individuals who may purchase a renewable term plan:

• Individuals looking for short-term coverage

Individuals looking for a short-term plan & do not want to purchase the plan for a longer duration can purchase this plan to secure their family members.

• Individuals with uncertainty about retirement

This plan may be opted for by individuals who are uncertain about their retirement age, i.e. whether they will work till the age of 50, 60 or 70.

• Individuals with a low budget

Individuals who have financial constraints& have less budget to pay the premium amount of a regular term plan, opt for a renewable term plan.

• Individuals with improving health

If you are trying to become healthier & are sure that in the coming years you will succeed in achieving good health, opt for a renewable term plan.

Features of Renewable Term Insurance

Provided are the with renewable options:

• Automatic Renewal

This plan allows auto-renewal of the policy when the policy tenure is complete without any need for new processes, making it a hassle-free & convenient one.

• Flexible Tenure

It allows for customisation of the policy tenure as per your changing requirements.

• Medical Tests Not Required

This plan does not require any additional medical examinations at the time of renewal, unlike other plans, which makes the process simpler.

• Increasing Premiums with Age

With growing age, the premiums also increase, considering the coverage remains the same with increasing age and changing health conditions.

Factors Affecting Renewable Term Plan Premium Amount

Provided are the factors affecting the premium amount in the case of a renewable term plan:

• Age

The younger the person, the lower the premium, as they are less prone to diseases and have longer life expectancies. With growing age, the premium amount increases as there is a high risk of mortality.

• Health Condition

In case of any pre-existing health condition, the premium would be on the higher side. Also, if any critical health problem occurs, the premium amount will also increase to cope with the increased risk.

• Lifestyle Habits

If you have high-risk hobbies such as skydiving, scuba diving, mountaineering, etc., it will lead to high premium costs as they can result in mortality risks.

• Coverage Amount

In case of a high coverage amount, the premium amount also increases, as the financial responsibility of the insurance company also increases.

• Policy Tenure

If you opt for a shorter policy tenure, you will have to pay a higher premium. On the contrary, if a longer tenure is chosen, the premium cost will decrease, but the total cost might increase.

Difference between the Regular Term Plan & the Renewable Term Plan

Provided are the differences between the regular term plan and the renewable term plan:

Why renewable term insurance? Eligibility Criteria

Provided are the eligibility criteria for the renewable term plan:

• The minimum age to opt for a renewable term plan is 18 years.

• The maximum age to opt for a renewable term plan is 60 years. Some insurance companies may allow you to opt for a plan till the age of 75 or 80 years old.

• At the time of initial application, medical assessments are performed, but there is no need to get the tests done once again at the time of renewal.

• This requires an individual to make regular & prompt payments towards the premium amount, failing which will lead to the lapse of the policy.

• One should check for a renewable option at the time of purchasing the policy.

Benefits of Renewable Term Plan

Provided are the benefits of a renewable term plan:

• Financial Security

In case of the sudden demise of the policyholder, the insurance company will provide the sum assured, which makes them feel financially secure.

• Short-term Solution

It makes the family financially secure for a shorter duration, i.e. no long-term commitment. However, it offers an extension option for coverage if required.

• Lower Premium Rates

The premium amount is lower at the start, but increases significantly at the time of renewal.

• Easy Renewal

It allows renewal of the policy without having to undergo a medical examination.

Conclusion

This plan best suits those individuals who are looking for an affordable and flexible plan to get renewable benefits without any medical check-ups. This plan provides financial security and mental peace to the policyholders and their family members.