What is a potential downside of renewable term assurance?

Renewable term assurance is designed to provide life insurance coverage for a specified term, with the option to renew the policy at the end of that term without the need for further medical underwriting. A significant characteristic of this type of insurance is that the premiums may be adjusted upon renewal, typically increasing with age and reflecting the insurer's assessment of risk at that time. Therefore, one of the potential downsides of renewable term assurance is the likelihood that the premiums will increase when the policy is renewed, which can lead to higher costs as the policyholder ages or as the term is extended.

While higher initial premiums, limited coverage duration, and restricted benefits can be relevant concerns with different types of life insurance products, they do not specifically pertain to the renewal aspect or the adjustment of premiums that occur in renewable term assurance. The focus on increased renewal premiums highlights a unique consideration for individuals seeking long-term protection who may be concerned about affordability as they age. This risk of escalating costs upon renewal can significantly affect the policyholder's long-term financial planning, making it a critical point of consideration when evaluating this type of insurance coverage.