Yearly Renewable Term (YRT)

What is ‘Yearly Renewable Term – YRT’

A term life insurance policy that lasts for one year. This sort of insurance provides policyholders with an estimate for the coverage they are purchasing for the current year. As long as you purchase an annual renewing term insurance policy, any premium quotes you get will be valid for the year in which you submit your request for a quotation.

This time next year, you will be required to pay a premium for a person who is exactly the same as you, but who is one year older. The next year, your premium will rise once again since you will be paying a premium for a person who is two years older than you are.

Premiums rise on a yearly basis to account for the increased risk associated with growing older. Term insurance with escalating premiums and yearly renewal term assurance are other terms for the same thing.

Explaining ‘Yearly Renewable Term – YRT’

Calculating the premium that will be paid based on a variety of risk factors is the responsibility of the actuaries. Actuaries can predict the age at which a policyholder will die based on a particular formula that takes these characteristics into account. It is possible to increase the premiums on an insurance as the policyholder becomes older.

These policies are particularly appealing to young insurance consumers who wish to get their feet wet with a low-cost, flexible premium in the outset. It also provides a death payment to any nominated beneficiaries if the insurance holder dies away during the policy’s one-year term.

Yearly Renewable Term FAQ

What is yearly renewable term reinsurance?

Yearly renewable term (YRT) reinsurance is a kind of risk transfer in which a primary insurer transfers a part of its risk to a reinsurer on an annual basis. It is determined by the policyholder's age, plan, and policy year how much reinsurance premiums will be paid by the ceding business. The reinsurance premiums for the amount that has been transferred to the reinsurer are renewed on an annual basis.

What type of term insurance is renewable?

When you purchase term life insurance, you may choose to have your coverage renewed on a yearly basis, rather than having to requalify for a new policy, known as a renewable term. Your existing insurance prices may increase as a result of your longer renewable term coverage.

Further Reading

    • Calculating first-to-die split dollar economic benefit – [PDF]
    • Life insurance: Dispelling illusions – [PDF]
    • Comparing Solvency II and Life and General Insurance Capital approaches to capital determination of a life portfolio in the presence of stress scenarios – [PDF]
    • Problems in agents’ compensation – [PDF]
    • An Empirical study on the reinsurance decisions of Korean life insurance companies – [PDF]
    • Factors affecting the successful uptake of life insurance in Cameroon: Zenithe Insurance Company, Buea, Cameroon – [PDF]