Check Box for Term Change

All right, then you need to change the above to something like this:

OR (
    AND (
         PRIORVALUE(Renewal_Term__c) < 12,
         ISCHANGED(Renewal_Term__c),
         Renewal_Term__c> 12
     ),
    AND (
           PRIORVALUE(Initial_Term__c) < 12,
           ISCHANGED(Initial_Term__c),
           Initial_Term__c > 12
     )
)

This will ensure that the prior value was less than 12 months and will only fire when it's changed to be greater than 12 months.