Policy Types

Yearly Renewable Term (YRT)

The different categories and structures of life insurance products.

Definition

What Is Yearly Renewable Term (YRT)?

Yearly renewable term (YRT) — also called annually renewable term (ART) — is a term life insurance policy that renews every year without requiring new evidence of insurability. Premiums increase annually to reflect the insured's increasing age and mortality risk. YRT is the purest form of term insurance — offering exactly one year of coverage at a time — and is the basis for the cost-of-insurance charges in universal life policies. While YRT premiums start very low for young applicants, they escalate significantly as the insured ages, eventually making long-term coverage far more expensive than a level term policy. YRT is most useful for short-term coverage needs or as a component of a universal life product.

Nevada Context

YRT is primarily used institutionally in Nevada (as the basis for UL/IUL COI charges) rather than as a consumer product, though some carriers offer it directly. Nevada consumers with short-term needs of 1–3 years may find YRT competitive.

How It Affects You

For short-term needs, YRT can be less expensive than buying a longer level term policy. However, if you may need coverage for more than 5–7 years, a level term policy will almost certainly be more cost-effective in the long run.

Real-World Example