1-Year Term Life Insurance—often called an Annual Renewable Term (ART) policy—is a short-term coverage option that provides flexibility for those in transitional life situations. While rare as a standalone product, it’s best suited for temporary financial needs. As a more practical alternative, 5-Year Term policies are better priced and more common. Visit our 5-Year Term Life Insurance page to explore that option.

What Is 1-Year Term (Annual Renewable Term)?

Annual Renewable Term (ART) life insurance provides coverage in one-year increments and can be renewed each year without new medical underwriting (within policy rules). It’s designed for short windows of protection—when you’re between jobs, waiting on employer benefits to begin, finalizing a divorce decree, or bridging to a longer policy decision.

How ART Pricing Works

ART premiums are based on your attained age each year. Because mortality risk rises with age, the premium steps up at every renewal. In many cases, year one can be inexpensive—sometimes cheaper than the first year of multi-year terms—but the total cost often becomes higher if you keep renewing for several years. If your needs could last beyond 12–24 months, a 5- or 10-year level term usually delivers better lifetime value.

Advantages of Annual Renewable Term

• Automatically renewable each year without another medical exam (subject to contract limits).
• Fast initial application—often a very low first-year premium.
• Useful during uncertain periods like career transitions, pending underwriting decisions, or short-term loans.

Things to Consider

• Rising premiums: Costs increase annually; long run renewals can outstrip the price of level term.
• Short horizon: ART is best for temporary needs, not multi-year family protection.
• Availability: Not all carriers or states offer ART; level term options are far more common.

Best Use Cases for 1-Year Term

• Bridge to benefits: Coverage gap while waiting for new employer-provided insurance to start.
• Short, defined debts: Temporary loan or business obligation that ends in under a year.
• Between policies: You’re replacing an expiring policy and need a brief overlap.
• Health uncertainty: You expect near-term medical or lifestyle changes and don’t want to commit to a longer term yet.

When a 5- or 10-Year Level Term May Be Wiser

If the need could last more than 12–24 months—covering a starter mortgage, early family years, or a multi-year loan—level term is usually more cost-efficient. Premiums are fixed for the duration, making budgeting easier and preventing the step-up costs that ART introduces. See our dedicated 5-Year Term guide for short-term level options.

Convertibility, Renewability & Riders

• Convertibility: Some ART contracts allow conversion to a permanent policy (with the same insurer) during a defined window—no new medical exam. This can preserve insurability if health changes.
• Guaranteed renewability: Many ART policies allow annual renewals to a specified terminal age; remember, premiums rise each year.
• Common riders: Accelerated death benefit (terminal illness), waiver of premium (disability), and child riders may be available depending on the carrier.

Underwriting Paths

Depending on age and face amount, you may qualify for accelerated/no-exam underwriting (database and Rx checks) for quick decisions. For some profiles, a brief medical exam can still unlock better pricing. We’ll match your situation to the most favorable route.

Comparison: 1-Year Renewable vs 5-Year vs 10-Year Level Term

Case Example

A 29-year-old job seeker needed life insurance until new coverage through an employer began in six months. Annual Renewable Term provided affordable protection immediately. However, when coverage was still needed after five years, they switched to a 5-Year Level Term policy for better long-term cost effectiveness.

Beneficiaries, Claims & Taxes (Quick Notes)

• Life insurance proceeds are generally paid income-tax-free to beneficiaries.
• Keep both primary and contingent beneficiaries updated; life events change needs.
• Most carriers pay claims promptly upon receiving required documentation.

Common Mistakes to Avoid

• Renewing ART too long: Costs can snowball; level term often wins beyond 1–2 years.
• Under-insuring: Forgetting debts, childcare, or income replacement when choosing the face amount.
• Ignoring convertibility: Losing the option to convert later if health changes.
• Waiting to apply: Delays risk a worse rate class or new exclusions.

Why Work with Diversified Insurance Brokers?

Since 1980, we’ve helped clients find the right term length—especially when short-term flexibility is required. While 1-Year Term exists, we often recommend 5-Year or longer level term policies for better price and stability. Learn more about our life insurance services, explore burial insurance, and see why families choose us.

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