Tennessee Insurance Practice Exam

If a 10-year Term Life policy includes a Renewability provision, what does this imply?

1. The policy will renew with new underwriting

2. The policy cannot be renewed

3. The policy will renew without evidence of insurability

4. The premium will decrease upon renewal

The correct answer is: The policy will renew without evidence of insurability

The presence of a Renewability provision in a 10-year Term Life policy means that the policyholder has the right to renew the policy at the end of the term without having to undergo new medical underwriting or provide evidence of insurability. This feature provides peace of mind and protection for the policyholder, as it ensures that they can continue their coverage regardless of changes in their health status that may occur during the initial policy term. This aspect is significant because it alleviates concerns about being denied coverage or facing higher premiums due to health issues that may have developed over the term of the policy. Therefore, the correct answer highlights this key benefit of having the Renewability provision in place, emphasizing the assurance it gives to policyholders for the continuation of their life insurance coverage.