As a sole earning member of your family, you would want your loved ones to be well-protected from the uncertainties of life, especially in your absence. While it is not easy to predict when an unfortunate mishap might take place, you can always be financially prepared. Investing in term life insurance ensures that your family gets the financial assistance they deserve in your absence.

There are types of term insurance policies that you can choose from. One such type of policy is the renewable term insurance. What is this policy? What are its benefits? Should you purchase it? Read more to find out.

What is term insurance?

A term life insurance plan is a type of life insurance policy. In this policy, the dependents of the policyholder are provided with financial assistance for the duration stipulated in the policy. If the policyholder were to pass away during the policy term, the family of the policyholder will receive a death benefit from the insurer. This amount can be help them manage the cost of living and plan a secure future. When it comes to selecting the type of policy, there are plenty of options that one can opt for. Examples include term plan with return of premium and convertible term plan.

What is renewable term insurance?

A renewable term insurance policy is a term plan which keeps renewing either on an annual basis or as per the duration of the contract. For example, if you have purchased a term plan for the duration of 5 years, it would expire after the duration of 5 years ends. However, with a renewable term insurance plan, the policy will get renewed at the end of 5 years. In this plan, when the policy is renewed, the premium gets reassessed. This means that the premium could increase after renewal. However, the protection of the policy continues.

What are the benefits?

The following are the benefits of a renewable term insurance policy:

  1. Lower premiums in the beginning

In renewable term insurance, the premiums start out lower. As the policy keeps renewing at the end of the specified term in the contract, the premium increases only after the renewal of the term. For example, if your premium at the beginning was Rs.5000, after renewal, it could become Rs.8000. This means that the increase is gradual and not sudden. Also, this allows you to have flexibility compared to a plan with a fixed premium.

  1. Duration is customisable

In renewable term insurance, you have the option of a stop-gap arrangement. As per this arrangement, you can have the policy renewed as per your wish. If you wish to stop the renewal or take a gap before the policy renews itself, you can do so with the help of this arrangement. Similarly, if you wish to opt for another policy in the future, you can approach this policy as a short-term solution without having to opt for a long-term plan.

  1. Re-examination is negated

A great advantage that you can take benefit of is the exclusion of re-examination. During the renewal, your insurer does not require you to get yourself re-examined medically. Usually, if a re-examination is done at a later stage, this could increase the premium quite drastically. However, with the exclusion of re-examination, not only is your money saved, but so is your time and energy.

Should you opt for it?

If you are planning on purchasing a term insurance, you should opt for renewable term insurance if:

  1. You cannot afford a traditional term insurance and want to start with lower premiums for a certain time period.
  2. You are not looking to commit to a long-term plan and want to stay invested in a short-duration policy.


If affordability or short-term protection are your objectives, you should go for renewable term insurance. You can get in touch with your insurance advisor to understand more about this policy. If you wish to know how much your term insurance would cost you, you can use the term insurance premium calculator from your insurer’s website.

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