There are several different types of insurance policies. They generally fall into the following two categories:

1. Term Life

2. Permanent

A renewable term life insurance policy is the sub-type of the term life insurance policy and is named as such because it is for a set term (period of time) that ranges from 1 to 30 years. Renewable term life insurance is the less expensive insurance policy type and thus is suitable for those who are on a tight budget but need an insurance coverage. Unlike permanent policies, renewable term life insurance policies don’t build equity.

A form of renewable term life insurance is Yearly Renewable Term or YRT also known as One Year Term. As the name suggests itself, it is required to be renewed every year. It provides a level death benefit and the premiums increase every year as the insured’s age increases. There is no cash value associated with an YRT policy and it provides financial protection only in the event of death.

Yearly renewable term life insurance policy is the type of insurance policies that are started with a lower initial premium, but they remain cost effective only for a few initial years as the premium increases on yearly basis.