What is Renewable Term Assurance ?
Renewable term assurance is level term assurance but with the flexibility to renew the plan regardless of your state of health at the point of renewal.
In short, you take out your term assurance for a set term, for example 10 years, but include the renewable option. At the 10-year anniversary you will be given the option to renew the plan free of underwriting (ie, no further medical questions) for a further 10 years.
Obviously there is a certain amount of risk on the life company in plans such as this and for this reason they only offer the renewal option to clients in a good state of health at outset. The monthly premiums are also likely to be more expensive to cover the increased potential cost of the benefit.
Apart from the renewal option within the plan, renewable term assurance runs in exactly the same way as level term assurance. As with all types of life cover, critical illness cover and waiver of premium benefit can also be built in.