Level Cost of Insurance vs YRT or ART – Annual Renewable Term

Term life insurance is a contract with level cost of insurance for its term for example 10 years term means that premiums will not change for the next 10 years respectively term 20 or term 100 means that premiums will not change for next 20 years or till age 100 for term 100 , where as ART (annual renewable term) or YRT (yearly renewable term) the cost of insurance is only good for one year so every year the premiums do increase. So therefore annual renewable term will ultimately be expensive affair in about 15 – 20 years as premiums definitely will increase in that time span unlike term life insurance for term 10 or 20 or 100 where premiums will at-least be fixed for the said term.

In initial-years ART will look attractive though due to lower pricing and annual renew-ability but if you do not want the cost of insurance to increase then you would want to go for the term insurance. If your purpose is to have cheap coverage and have more into investments so ART is used in Universal life insurance contract to keep the cost of insurance low and let the investment funds grow more, and then their intention is only to cash out with in 15-20 years, so that way the real effect of ART before it shows huge jump people would cash on depending on what are your interest and what returns you expect from your investment ,you can further discuss it with our broker/agent on our contact page or give us a direct call on tollfree 1.800.283.5467


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