New York Child Abuse Identification and Reporting Practice Exam

Which type of life insurance policy can be renewed yearly without a medical examination?

1. Whole Life

2. Universal Life

3. Renewable Term

4. Variable Life

The correct answer is: Renewable Term

The choice of Renewable Term insurance is correct because this type of policy is specifically designed to allow the policyholder to renew coverage each year without undergoing a medical examination. This feature provides significant flexibility and ease, especially for those who may have health changes that could affect their insurability. Renewable Term policies are structured to offer a level of continued protection while eliminating the need for re-evaluation of health status at each renewal. Consequently, if a policyholder’s health deteriorates or they develop a serious condition, they will still retain the ability to maintain their insurance coverage without the risk of being declined or facing increased premiums based on their health changes. Whole Life, Universal Life, and Variable Life policies typically do not include this renewable feature without a medical exam upon the renewal of term insurance. They are characterized by different structures such as cash value accumulation, investment components, or permanent coverage rather than the specific annually renewable provision found in Renewable Term insurance. Thus, recognizing the unique advantages of Renewable Term policies is crucial in understanding why this option is the correct choice.