Yearly Renewable Term Plan of Reinsurance

A yearly renewable term plan of reinsurance is a type of life reinsurance where mortality risks are transferred to a reinsurer. In the yearly renewable term plan of reinsurance, the primary insurer (the ceding company) yields to a reinsurer its net amount at risk (the difference between the face value and the cash value of a life insurance policy) for the amount that is greater than the retention limit on a life insurance policy to a reinsurer. If the insured dies, the reinsurance pays the portion of the death benefit that is equal to the net amount of risk. Also called yearly renewable term (YRT) or risk premium reinsurance basis.