Annual Renewable Term (ART) Life Insurance is no longer a prominent product on the market. It is, however, still fairly common to see a level premium, level term plan become ART when the level period ends.
For example, if a customer purchases a 10 year term plan from an insurance company, at the end of the term, the insured person can renew the policy without proof of insurability each year. In other words, the rates that have been level for 10 years will now be level for a year... then the plan renews again... the rates go up... remain level for another year... the plan renews again... the rates go up... and so on. This can be a pricey proposition over time since as you get older, the rates rise continuously.
So although the rates are not locked in for an extended period of time, for someone with a terminal disease that could otherwise not secure coverage-- annual renewability without proving insurability is a comforting feature.
