What does it mean for term insurance to be renewable?

Choosing to define term insurance as renewable means that the policyholder has the option to extend the coverage for another term period without undergoing a new health assessment. This feature is particularly beneficial; as individuals age, their health may decline, making it difficult or more expensive to obtain new life insurance coverage. With renewable term insurance, the policyholder can maintain their coverage even if their health status changes, providing peace of mind that they have continued life insurance protection without the hassle of re-evaluation.

The other options do not accurately describe the concept of renewable term insurance. For example, changing the policy type or automatic conversion to whole life insurance would involve different processes and terms, which are not inherent to the renewal feature. Additionally, guaranteeing a payout regardless of circumstances relates more to policies like whole life or guaranteed issue plans rather than the specific renewal aspect of term insurance.