Washington Life Producer Practice Exam

In a renewable Term Life insurance policy, what does the policyowner have the right to do?

1. Adjust the premium payments

2. Renew the policy without proof of insurability

3. Change the beneficiary without restrictions

4. Alter the death benefit amount

The correct answer is: Renew the policy without proof of insurability

In a renewable Term Life insurance policy, the policyowner has the right to renew the policy without having to provide proof of insurability. This feature is essential because it allows individuals to maintain coverage even if their health status has changed since the initial purchase of the policy. This means that at the end of the initial term, the policyowner can extend the coverage for another term, ensuring that they continue to have life insurance protection without undergoing medical underwriting. This is particularly advantageous for those who might face health issues later on or find it challenging to obtain new insurance coverage due to changes in their health. The ability to renew without proof of insurability is a fundamental characteristic of renewable term policies, distinguishing them from other types of policies that may have stricter conditions upon renewal.