yearly renewable term
Yearly Renewable Term is life cover that resets and reprices every single year, so your premium creeps up as you age instead of staying fixed.
In plain English
Almost every Nigerian who has ever renewed a car particulars sticker knows that calm dread of the letter that says your premium has gone up again, with no explanation beyond 'you are now a year older, oga'.
Yearly Renewable Term life insurance works on that exact rhythm. You buy one year of cover at a time. At the end of the year, the insurer looks at your age and renews the policy, but at a new, usually higher, premium, because you are now a year closer to the risk they are covering.
There is no long term price lock like you get with ordinary term life insurance, where ₦25,000 a year might stay flat for ten or twenty years. With Yearly Renewable Term, the insurer reprices you annually, so a 30 year old might pay ₦18,000 in year one and find themselves paying ₦40,000 by year fifteen, purely because the calendar moved.
It suits someone who wants cheap cover right now and is not thinking too far ahead, perhaps a young Nigerian professional in Lagos covering a short term loan, or someone in the diaspora who needs a temporary safety net while between jobs in the United Kingdom before their employer's group scheme kicks in.
The catch is that because premiums climb with age, this type of policy can become expensive exactly when you are older and most likely to need the payout, which is the opposite of when insurance should feel like a burden.
A 35 year old Nigerian buys Yearly Renewable Term with ₦20,000,000 cover. Year one costs ₦15,000. By year twenty, at age 55, the same cover might cost ₦95,000 a year, because each renewal repriced the risk of an older person.
Questions people ask
Is Yearly Renewable Term the same as ordinary term life insurance?
No. Ordinary term life insurance usually locks your premium for the whole term, say ten or twenty years. Yearly Renewable Term reprices you every single year based on your current age, so the cost keeps climbing.
Why would anyone choose Yearly Renewable Term over a fixed term policy?
It is often cheaper in the early years, which suits people who need short term cover, such as backing a loan for a year or two, and do not plan to keep the policy for decades.
Can the insurer refuse to renew my Yearly Renewable Term policy?
Some policies guarantee renewal up to a certain age regardless of health changes, but you should check the fine print, because not all insurers guarantee this, and your premium will still rise yearly either way.
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