DEFINITION of 'Renewable Term'

A clause in a term insurance contract that allows the beneficiary to extend the coverage term for a set period of time without having to requalify for coverage. A renewable term is contingent on premium payments being up to date, as well as a renewal premium being paid by the beneficiary.

BREAKING DOWN 'Renewable Term'

In the context of a life insurance contract, having a renewable term clause would be beneficial, as future health circumstances are unpredictable. Although the initial premiums are likely to be higher than those of a life insurance contract without a renewable term clause (the insurance company must be compensated for this increase in risk), buying this type of insurance is often in the beneficiary's best interest.

RELATED TERMS
  1. Annual Renewable Term (ART) Insurance

    A form of term life insurance that offers a guarantee of future ...
  2. Term Life Insurance

    A policy with a set duration limit on the coverage period. Once ...
  3. Yearly Renewable Group Term Insurance ...

    A type of insurance policy purchased by employers to cover several ...
  4. Beneficiary Clause

    A beneficiary clause is a provision in a life insurance policy ...
  5. Yearly Renewable Term - YRT

    A one-year term life insurance policy. This type of policy gives ...
  6. Full Reporting Clause

    Full reporting clause is an insurance policy provision requiring ...
Related Articles
  1. Insurance

    Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.
  2. Insurance

    Term Life Insurance: Everything You Need to Know

    Term life insurance is an affordable way to financially protect your loved ones after your death. Here's what you need to know before purchasing a policy.
  3. Insurance

    Life Insurance: How To Get the Most Out Of Your Policy

    There are many benefits to owning a life insurance policy - if you get the right one for you.
  4. Financial Advisor

    Advising FAs: Explaining Life Insurance to a Client

    Life insurance was initially designed to protect the income of families, particularly young families in the wealth accumulation phase, in the event of the head of household's death.
  5. Insurance

    4 Reasons Why Waiting To Buy Life Insurance Is a Bad Idea

    Understand the benefits of applying for and securing life insurance coverage while you are young and healthy, and learn the cost of waiting to get coverage.
  6. Personal Finance

    Why Your Will Needs a 'Titanic Clause'

    If you don't have a Titanic clause in your will and disaster strikes, there's no guarantee that your intended beneficiaries will inherit your assets.
  7. Investing

    What's a Contingent Beneficiary?

    A contingent beneficiary is a person who will receive a payout from a will, trust, life insurance policy or other annuity, based on a specific condition. For an insurance policy, the contingency ...
  8. Retirement

    Who is a Beneficiary?

    A beneficiary is a person or entity that receives funds, assets, property or other benefits from a trust, will, or life insurance policy.
  9. Insurance

    Life Insurance: putting a Price on Peace of Mind

    Would your death leave loved ones financially stranded? Find out how to ease your mind and keep them protected.
RELATED FAQS
  1. What types of insurance policies have contingent beneficiaries?

    Learn what types of insurance policies use contingent beneficiaries and what conditions must be met for the contingent beneficiary ... Read Answer >>
  2. How are contingent beneficiaries informed of a payout?

    Understand how contingent beneficiaries are made aware of a policy payout, and learn what policy owners can do to ensure ... Read Answer >>
  3. What does U.S. law say about contingent beneficiaries?

    Learn about regulations the United States has on the naming of contingent beneficiaries, the types of contingencies that ... Read Answer >>
  4. If both the primary and contingent beneficiaries are unavailable, what happens to ...

    Understand the difference between primary and contingent beneficiaries and what happens to assets when neither are present ... Read Answer >>
Hot Definitions
  1. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  2. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  3. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center