Annual Renewable Term

The minimum period of Term is one year. During this period if death occurs, the Insurance Company would pay the death benefit. After the end of the year, it is renewable. No benefit is paid if the insured dies one day after the last day of the one-year term. The premium is based on the expected probability of death of the insured during that one-year apart from the cost and profit component for the insurer. As purchasing of coverage is not cost effective, policy, which is renewable after the one-year term is introduced. This is called Annual Renewable Term (ART).

The premium is paid for Term of one-year's coverage, but the policy is guaranteed to be able to be continued each year for a specified period of years and varies from 10 to 20 years, or until age 95 sometimes. The premium is slightly higher than for a one-year's coverage.

Suitable for financial obligations, which remain constant for a short or intermediate period such as income during a minor's dependency