What is "renewable term" life insurance?

Renewable term life insurance is a type of policy that offers the policyholder the right to renew their coverage at the end of the term period without needing to provide proof of insurability. This means that even if the insured's health has declined since the original policy was taken out, they can still renew their policy at the end of the term duration without undergoing a new medical examination or providing additional health information. This feature is particularly advantageous for policyholders who may have concerns about their health affecting their ability to obtain life insurance in the future.

The ability to renew without proof of insurability provides a measure of security and flexibility, allowing the insured to maintain their life insurance coverage even as they age or develop health issues. This aspect is a key distinguishing characteristic of renewable term policies compared to other types of life insurance.

The other choices do not accurately reflect the nature of renewable term life insurance. For example, a policy that cannot be renewed after the first term would not be classified as renewable, while a permanent insurance policy with a cash value represents a completely different structure aimed at lifelong coverage. Additionally, a policy that automatically converts to a whole life policy describes a conversion feature rather than the renewable nature of term insurance.