Final answer:
Annual renewable term insurance is a type of life insurance policy where premiums increase each policy anniversary based on the current age of the insured person.
Step-by-step explanation:
The type of life insurance policy in which premiums increase each policy anniversary based on the current age is known as annual renewable term insurance. In this type of policy, the premiums are typically low when the policy is initially purchased and increase as the insured person gets older. The increase in premiums is based on the insured person's attained age at each policy anniversary.
For example, let's say a 40-year-old individual purchases an annual renewable term policy with a $500,000 death benefit. The premiums for the first year might be $500, but at the policy's anniversary next year, the premiums will increase based on the individual's new current age, which is 41. The premiums will continue to increase each year as the individual gets older.