What type of policy expires each year but can be renewed with increasing premiums?

The type of policy that expires each year but can be renewed with increasing premiums is known as an annually renewable policy. This policy typically offers coverage for a term of one year at a time, and upon expiration, it allows the policyholder to renew for another year. However, the premiums tend to increase with each renewal, reflecting the increasing risk associated with the insured's age and potentially other underwriting factors.

In contrast, a level term policy provides coverage for a specified term (such as 10, 20, or 30 years) with fixed premiums that do not change throughout the term. A whole life policy is designed to remain in force for the entire life of the insured, with premiums that generally remain level throughout the policy's life. Limited pay policies require premiums to be paid for a limited time, but once paid, the policy remains in force, often for the insured's lifetime.

Thus, the annually renewable policy stands out because of its unique feature of annual expiration and renewability with increasing premiums, making it distinct from the other options.