Which type of insurance can be extended without medical evidence at the end of the term?

Which type of insurance can be extended without medical evidence at the end of the term?

• A. Level term insurance.
• B. Decreasing term insurance.
• C. Convertible term insurance.
• D. Renewable term insurance.

Answer: (D)

Renewable term insurance is designed to allow policyholders to extend their coverage at the end of the term without the need for medical evidence. This means that upon renewal, the insurer cannot require the policyholder to undergo a new medical examination or provide additional health information, regardless of any changes in health status since the original policy was taken out. This feature is particularly valuable for individuals who may develop health issues later, ensuring they can still obtain coverage without facing additional underwriting hurdles or higher premiums. In contrast, the other types of insurance listed do not offer the same advantages. Level term insurance typically defines a fixed death benefit amount for a specific term but does not guarantee renewal without underwriting. Decreasing term insurance, which often aligns with declining financial obligations like a mortgage, also does not facilitate renewal without medical evidence; in fact, it is structured to decrease in value over time. Convertible term insurance allows conversion to a permanent policy, but this process often involves some level of medical evaluation depending on the insurer's guidelines. Thus, renewable term insurance stands out because of its unconditional renewal feature, making it a favorable option for maintaining life insurance coverage.

Renewable term insurance is designed to allow policyholders to extend their coverage at the end of the term without the need for medical evidence. This means that upon renewal, the insurer cannot require the policyholder to undergo a new medical examination or provide additional health information, regardless of any changes in health status since the original policy was taken out. This feature is particularly valuable for individuals who may develop health issues later, ensuring they can still obtain coverage without facing additional underwriting hurdles or higher premiums.

In contrast, the other types of insurance listed do not offer the same advantages. Level term insurance typically defines a fixed death benefit amount for a specific term but does not guarantee renewal without underwriting. Decreasing term insurance, which often aligns with declining financial obligations like a mortgage, also does not facilitate renewal without medical evidence; in fact, it is structured to decrease in value over time. Convertible term insurance allows conversion to a permanent policy, but this process often involves some level of medical evaluation depending on the insurer's guidelines. Thus, renewable term insurance stands out because of its unconditional renewal feature, making it a favorable option for maintaining life insurance coverage.