Annual Renewable Term Life Insurance ART: Coverage, Quotes, Rates, Policy, Companies, Information

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This year, insurance has gotten some bad press, and the companies that sell insurance have been generally portrayed as larcenous. Such charges may indeed be valid in many cases, but fortunately, life insurance is inherently immune to the primary complaint weighed against insurance companies, namely the claim that once a patient falls ill, the insurance company drops his or her coverage, making the purchase of insurance altogether pointless.

Yes, the way health insurance contracts work, it's perfectly legal for insurance companies to sell you coverage and then leave you in a tight spot when the medical expenses come pouring in. After all, health insurance is renewed yearly. If you develop a serious medical condition, there is a good chance that your coverage will expire before you've finished receiving treatment, and when it's time to renew coverage, your insurer may not be willing to write you a new contract—at least not at the same low rates you paid the previous year.

Life insurance works differently, however. Yes, you can buy a life insurance policy which must be renewed every year, and when it renews, your physical condition (mortality risk) is not reassessed. You remain in the rate class you held when you purchased the first year of the renewable policy!

Such a product is called annual renewable term life insurance (ART). With ART life insurance, your rates do increase every year, in order to reflect your advancing age, but this increase takes place on an increment which has nothing to do with your health.

Insurance companies generally place a ceiling on how far an annual renewable term life insurance policy may be perpetuated, though. That is, a company might sell an ART life insurance policy which can only be renewed until the insured reaches 50 years of age, thereby restricting the use of http://www.wholesaleinsurance.net/">term life insurance to protect only against early death. Even so, a person could get multiple decades of coverage out of an ART life insurance policy, without ever exposing himself or herself to the risk of uncontrollably escalating premiums or of simply becoming uninsurable.

Even alternatives to annual renewable term life insurance are more secure than health insurance. Standard term life insurance is not renewable, but unlike medical insurance, its term of coverage is longer than one year. Life insurance companies sell policies of 5, 10, 15, 20, and sometimes 25 or 30 years. If you fall ill during the term of coverage, the insurer may have to wait a long time before it can cut you loose, depending on just how long a policy you buy and how late you fall ill.

Article by WholesaleInsurance.net writer Markham Anderson.

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