Term insurance that renews each year at a higher premium is:

The correct answer is Annual Renewable Term (ART). This type of term insurance is designed to provide coverage on an annual basis, allowing the policyholder to renew the policy each year without having to provide evidence of insurability, regardless of any changes in their health status. However, as the policy renews each year, the premium increases based on the insured's age and the insurer's adjustment for rising costs associated with the risk of insuring an older individual.

This structure makes ART a flexible short-term option for those seeking life insurance coverage, albeit at the cost of potentially higher premiums in subsequent years. It is particularly suitable for individuals who may only need coverage for a limited time or who expect to transition to a different insurance product in the future.

In contrast, level term insurance maintains a fixed premium throughout the policy's term, providing predictable costs. Decreasing term insurance features premiums that remain level while the death benefit decreases over time; this is often used for mortgage protection to align decreasing benefits with outstanding debt. Convertible term allows the policyholder to convert to a permanent policy without evidence of insurability but does not inherently involve annual adjustments to the premium based on increased age. Each of these terms serves specific purposes and meets different needs, but the annual renewal