Why might a policyholder choose Yearly Renewable Term (YRT) insurance?

A policyholder may choose Yearly Renewable Term (YRT) insurance primarily because it offers lower initial mortality costs compared to other types of insurance. This product is designed to provide coverage for one year at a time, with the premium generally increasing annually based on the insured's age and other risk factors. In the early years, the costs are significantly lower, making it an attractive option for individuals who want to secure coverage at a more affordable rate initially.

This structure allows younger policyholders or those in good health to obtain necessary coverage with minimal costs upfront, making it accessible for many. Over time, as premiums increase due to age-related risk factors, the policyholder may decide to reevaluate their needs or convert to different coverage options if necessary.

The other options present aspects that do not accurately reflect the characteristics of YRT insurance. For instance, YRT does not inherently guarantee lifetime coverage regardless of age. Also, it does allow for the possibility of converting to other types of insurance plans, which means the assertion about disallowing the switch to Level Cost of Insurance is misleading. While the initial costs are higher in other products, the nature of YRT specifically highlights its appeal through the lower costs at the outset.