Re-entry Term Insurance

What Does Re-entry Term Insurance Mean?

Re-entry term insurance refers to a policy that offers a low premium for a specific period, but can only be renewed if the insured successfully passes a medical examination after that period ends. If the insured fails the medical exam, renewing the policy will result in a higher premium. It is one form of term life insurance, with the trade-off built around that future medical check.

Insuranceopedia Explains Re-entry Term Insurance

In the 1970s, re-entry term insurance emerged as the industry’s solution for providing less expensive life insurance. Policyholders initially pay a low premium, but renewing the policy later requires passing a medical exam; if they fail, the premium increases. Naturally, the renewal period often coincides with the policyholder’s older age, when health challenges are more likely. In other words, what begins as affordable insurance can ultimately become costly. Buyers who don’t want to gamble on the renewal exam sometimes choose no medical exam life insurance instead, since those policies don’t require one to qualify.