Guides
Annual renewable term (ART) life insurance
ART covers you one year at a time, renewable without a medical exam, with a premium that rises every year. Where you'll meet it, what it costs and who it suits.
Annual renewable term (ART), also called yearly renewable term, is life insurance that covers you one year at a time. You can renew it each year without a new medical exam, but the premium is recalculated for your age at every renewal, so it goes up every year. ART is the cheapest coverage in year one and the most expensive over a long stretch, which makes it a good fit for short, temporary needs and a poor one for a 20-year family obligation.
How ART works
An ART policy is guaranteed renewable: as long as you pay, the insurer must renew it each year regardless of changes in your health, up to a maximum age stated in the contract. What changes is the price. Each renewal premium is based on your attained age, your age at that renewal, rather than your age when you bought the policy. The NAIC's consumer overview describes renewable term the same way: it can be renewed at the end of each term without proof of insurability, as long as premiums are paid.
The contract includes a table of guaranteed maximum premiums for every future year. Many insurers charge less than the maximum (the "current" rate), but they can raise current rates up to the guaranteed ceiling for everyone in your class. When you compare ART policies, the guaranteed column is the one you can count on.
ART differs from level term insurance, where the insurer averages your rising risk over 10, 20 or 30 years and charges one flat premium. With ART you pay roughly the true cost of each year's risk as you go.
Why the premium rises every year
ART pricing tracks the odds of death, and those odds climb steadily with age. According to the Social Security Administration's 2023 period life table, the chance of dying within one year for the general U.S. population looks like this:
| Age | Men | Women |
|---|---|---|
| 35 | 0.26% | 0.12% |
| 45 | 0.39% | 0.22% |
| 55 | 0.75% | 0.45% |
| 65 | 1.65% | 1.02% |
| 75 | 3.38% | 2.38% |
The risk roughly doubles each decade from midlife on. Insured people are healthier than average, so insurers' rates are lower than these population figures would suggest, but ART premiums follow the same upward curve, plus expenses. By the time you're in your 60s and 70s, each year's increase is large in dollar terms.
Where you'll actually meet ART
At the end of a level term policy. When the level period on a 10-, 20- or 30-year policy ends, most policies switch to annually increasing premiums. Many can be kept to age 95; State Farm, for example, says its Select Term policies can be kept in force after the initial term "at an increased cost up to age 95" (source; see State Farm). A 2021 Society of Actuaries study found that this "jump to ART" design is the most common post-level structure in the U.S., with the first renewal premium sometimes 10, 20 or even 30 times the level premium. Options at that point are covered in renewing term life insurance after the level period ends and what happens when your term life policy expires.
At work. Supplemental life insurance through an employer is commonly priced in age bands, often five years wide, so your rate steps up as you move into each new band. It's ART in five-year steps. See supplemental (voluntary) life insurance at work.
For veterans. Veterans' Group Life Insurance (VGLI): eligibility, cost and conversion, the group term coverage veterans can keep after leaving the military, works the same way. The VA's published rates, effective July 1, 2025, show these monthly premiums for the $500,000 maximum:
| Age band | Monthly premium for $500,000 |
|---|---|
| 29 and younger | $30 |
| 40 to 44 | $70 |
| 50 to 54 | $145 |
| 60 to 64 | $425 |
| 70 to 74 | $1,075 |
| 80 and older | $2,200 |
VGLI lasts for life as long as premiums are paid, the price depends only on age, and veterans who apply within 240 days of leaving service skip the health review. That makes it valuable for veterans with health conditions, but the cost climbs steeply with age.
As a standalone policy. Some insurers sell individual ART policies, and businesses sometimes use them for short-term needs such as covering a key employee during a transition. Ask whether the illustrated rates are guaranteed or current.
ART vs level term over 20 years: a hypothetical
These numbers are invented to show the shape of the trade-off, not market prices. Say a 40-year-old can buy $500,000 of ART starting at $250 a year and rising 9% a year, or a 20-year level term policy for $450 a year.
| Year | ART premium that year | Total ART paid so far | Total level term paid so far |
|---|---|---|---|
| 1 | $250 | $250 | $450 |
| 5 | $353 | $1,496 | $2,250 |
| 10 | $543 | $3,798 | $4,500 |
| 15 | $835 | $7,340 | $6,750 |
| 20 | $1,285 | $12,790 | $9,000 |
ART costs less each year for the first seven years and less in total through year 13; in this example, cumulative costs cross in year 14. By year 20 the ART buyer has paid about 40% more in total and faces a premium nearly three times the level rate, still rising. If the need lasts only five or eight years, ART wins. If it lasts 20, level term wins, and it also protects you from deciding, year after year, whether to keep paying a growing bill. The How long a term do I need? can help you estimate how long your need really runs.
Who ART suits
- Short, defined needs. Covering a loan with two or three years left, income until a spouse's pension starts, or a gap until a business sale closes.
- Needs likely to end soon but with an uncertain date, where renewing year by year beats locking in a 10-year price.
- Business uses such as short-term key person coverage.
- People keeping existing coverage after a health change, for whom renewal (even at rising rates) is cheaper than any new policy they could qualify for.
Who it doesn't suit
- Young families with obligations running 15 years or more. A level policy costs less over that span and the price never surprises you.
- Tight budgets. Rising premiums tend to get dropped exactly when coverage is hardest to replace.
- Older buyers with long needs. At 60 and beyond, annual increases are steep in dollar terms; the odds of outliving your term shows how quickly the odds rise.
What to check in an ART policy
- The guaranteed maximum premium for every year you might keep it, not just the current rate.
- The last age at which you can renew.
- Whether it's convertible to permanent coverage, and until what age.
- Whether the insurer can raise current rates, and how much notice it gives.
- How the cost over your expected holding period compares with 10- and 20-year level quotes.
Key takeaways
- ART renews each year without new underwriting, but the premium is reset for your age every year.
- It is the cheapest coverage at the start and becomes more expensive than level term over long periods.
- You'll most often meet ART after a level term policy ends, in age-banded group life at work, and in VGLI.
- It suits needs of a few years; for obligations of 15 years or more, level term usually costs less in total.
- Compare guaranteed maximum premiums, the last renewal age and conversion rights, not just year-one price.