What Kind of Term Life Insurance Should I Buy?

This simple question does not have a simple answer. About 1985, the author had the assignment of developing new term rates for Massachusetts Savings Bank Life Insurance (Mass SBLI), which remains an excellent source of term life insurance if available in your state: www.sbli.com. Virtually all term life sold then was Annual (or Yearly) Renewable Term – ART or YRT – in which the premium increases each year with age. ART is renewable automatically each year without evidence of insurability; in the early 1980s it was generally renewable to age 65 or 70. Since then the last renewal age for most insurers has increased to at least age 80 and often to age 95, not that you would want to renew that long. ART policies are almost always convertible without evidence of insurability to (much higher) level premium cash value policies – whole life, universal life and variable universal life – before some limiting age that varies widely, from age 65 to age 85. ART premium schedules are not guaranteed; insurers reserve the Page 2 right to increase future premiums, but not higher than contract maximums. ART buyers can reasonably assume that rate schedules will not be increased because: (1) life insurance mortality keeps improving; and, (2) increasing the premium more than the expected amount encourages those in best health to move to another insurer, leaving the original insurer with a worse, perhaps losing, block of business. The author in 25 years has not heard of any ART insurer that raised its rate schedules, but this does not mean none has taken place.