Which type of term insurance has premiums that increase annually?

Annually renewable term insurance is a type of term life insurance where the coverage is renewed each year, and the premiums are structured to increase annually as the insured ages. This increase in premiums reflects the higher risk to the insurer as the insured gets older. Initially, this insurance product often starts with lower premiums compared to level term insurance, but the cost increases every year, making it important for policyholders to be aware that their premiums will not remain constant over time.

Level term insurance features consistent premiums throughout the policy period, while decreasing term insurance has premiums that typically remain level, but the death benefit declines over time. Increasing term insurance, on the other hand, is designed to increase the death benefit over the policy’s life, usually in predefined increments, but it doesn't focus on premium structure like annually renewable term does. Thus, annually renewable term insurance is distinctive for its specific annual premium adjustments.