What is a Renewable Term Insurance Policy?

Written by : Knowledge Center Team

2021-06-10

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A renewable term insurance is a defined benefit provision that requires the recipient to continue the service term for a fixed amount of time without re-qualifying for new coverage. A renewable term is dependent on timely premium costs and the beneficiary's payment of a renewal premium. A term life insurance is the simplest and purest form of life insurance policy that lasts for a certain amount of time, usually 10 to 30 years. The policyholder can choose the policy term as per their coverage needs and financial affordability.

How Does a Renewable Term Insurance Plan Work?

A renewable period clause in a life insurance policy would be advantageous when potential health circumstances are uncertain. We have understood the benefit of having a life cover when the pandemic started growing. And now, it has become a quintessential part of our financial planning strategy.

While the original premiums are expected to be greater than that with a life insurance policy without a renewable period option (because the insurance provider would pay for the increased risk), this form of insurance is useful.

In general, a term life insurance contract with a renewable term offers peace of mind in a worst-case situation. The original contract for an annual renewable term (ART) life policy is for one year and is renewed periodically. Insurability is guaranteed for a certain number of years, and the death insurance is fixed. Renewability allows an account holder to retain their existing coverage without re-qualifying (though at a significantly higher cost).

Learn why should you renew your term insurance policy?

4 Benefits of Renewable Term Insurance Plans

Buying the best term life insurance ensures a peace of mind and financially secured life for you and your loved ones. That is the reason a lot of people buy term plans online as it helps them prepare for future contingencies. Let us closely have a look at the various benefits offered by term insurance plans:

1. At the end of your original contract, you will redeem your coverage.

2. Beneficiaries will receive death benefits if the policyholder passes away, and the amount they receive can be used for paying of any unpaid debts and liabilities.

3. Allows you to renew your term life insurance contract without having to go through the renewal process all over again.

4. You are not required to answer medical questions or take a medical test to show the insurability.

How can iSelect Smart360 Term Plan help you?

iSelect Smart360 Term Plan by Canara HSBC Life Insurance is a protective hedge against life's uncertainties. A highly adaptable term package that can cater to all life stages and life insurance needs. Let us have a deeper look into the basic features offered by the iSelect Smart360 Term Plan to help you understand why we recommend it.

Primary Features of iSelect Smart360 Term Plan

1. Life insurance coverage at a reasonable price with the option to cover for a specific amount of time or the rest of your life.

2. We tailor the package to your preferences by selecting from various coverage, monthly payment, and bonus compensation plans.

3. Multiple premium payment options are available, including a single bullet payment throughout the entire contract, payment for a fixed period of 5/10/15/20/25 years, or payment only throughout your working years, i.e., when you reach the age of 60, in addition to payments during the Policy.

4. Term Discounts on premium for higher Sums Assured and female lives, and loyalty discounts for current clients and customers.

5. Benefits may be received as a lump sum, monthly pay, or a combination of the two, with the option to choose between level and increasing income.

6. Increase your life insurance coverage as the life phases and security requirements change, all while staying under the same package.

7. Section 80C of the Income Tax Act of 1961 allows you to exclude the premium you pay for this scheme. Lump-Sum – In this case, the insurer covers the benefit in one lump sum.

Renewable Term Life vs Convertible Term Life: What's the Difference?

Renewable term life insurance is often confused with convertible term life insurance. Although a renewable term life insurance merely extends your existing coverage, a reversible term life insurance policy requires you to convert your coverage at any time within your term. A policyholder may change his or her term life insurance to full life insurance.

The two forms of policies are comparable in that the patient does not have to re-qualify or pass further screening, regardless of his or her fitness. Renewable term insurance coverage cannot be converted to whole life insurance, whereas it can convert convertible term life insurance to whole life insurance.

Renewable lifetime life insurance is a contract that can be renewed before the term expires. If you already have financial commitments after your insurance expires, such as a mortgage or university payments, these plans will provide you with the stability you need.

When you renew, keep in mind that the prices will increase depending on your age. Get the iSelect Smart360 Term Plan by Canara HSBC now as you can easily increase the sum assured with growing life stages.