Yearly Renewable Term (YRT)

A yearly renewable term (YRT) is a type of life insurance policy that provides coverage for a specific period of time, usually one year. At the end of each year, the policy owner has the option to renew the policy for another year, or to let it lapse. If the policy is allowed to lapse, the death benefit will be forfeited.

YRT policies are often used by people who want to have life insurance coverage for a short period of time, such as until they reach a certain age or until they have paid off a debt. YRT policies are also often used by people who are not sure if they will need life insurance in the future.

The main advantage of a YRT policy is that it is relatively inexpensive. The premiums are typically lower than the premiums for a permanent life insurance policy. This is because the death benefit of a YRT policy is smaller than the death benefit of a permanent life insurance policy.

The main disadvantage of a YRT policy is that it does not provide permanent coverage. If the policy owner dies after the policy has lapsed, the death benefit will not be paid.

YRT policies are not suitable for everyone. People who need permanent life insurance coverage should not purchase a YRT policy. However, YRT policies can be a good option for people who want to have life insurance coverage for a short period of time.

Here are some additional things to keep in mind when considering a YRT policy:

* The premium for a YRT policy will increase each year. This is because the death benefit of the policy will increase each year.
* YRT policies do not have cash value. This means that the policy owner cannot borrow against the policy or use the policy to pay for other expenses.
* YRT policies are not eligible for tax-advantaged treatment. This means that the premiums for the policy are not tax-deductible, and the death benefit is not included in the policy owner's estate.

If you are considering purchasing a YRT policy, it is important to speak with a financial advisor to make sure that it is the right type of policy for you.