What defines Renewable Term?

What defines Renewable Term?

• A. Premium never increases.
• B. Right to renew without evidence of insurability; premium based on attained age.
• C. Converts to cash value.
• D. Cancellable by insurer at any time.

Answer: (B)

Renewable term is defined by the ability to extend coverage at the end of the term without proving you’re still insurable, with the new premium determined by your age at renewal (attained age). This means you can keep the policy in force after the initial term, but the price rises as you get older because the premium is based on your age at the time of renewal. The other statements don’t fit: premiums don’t stay completely flat forever, since renewal pricing uses attained age; converting to cash value is a feature of permanent policies, not term; and renewable term isn’t defined by the insurer canceling the policy at any time.

Renewable term is defined by the ability to extend coverage at the end of the term without proving you’re still insurable, with the new premium determined by your age at renewal (attained age). This means you can keep the policy in force after the initial term, but the price rises as you get older because the premium is based on your age at the time of renewal.

The other statements don’t fit: premiums don’t stay completely flat forever, since renewal pricing uses attained age; converting to cash value is a feature of permanent policies, not term; and renewable term isn’t defined by the insurer canceling the policy at any time.