Oklahoma Life Producer Practice Exam

A Renewable Term policy guarantees what for the policyholder?

1. Lower premiums at renewal

2. Insurability without proof of health

3. Lifetime coverage regardless of age

4. Cash value accumulation

The correct answer is: Insurability without proof of health

A Renewable Term policy provides the policyholder with the guarantee of insurability without proof of health at the time of renewal. This means that when the policyholder's term expires, they can renew their coverage for another term without needing to provide evidence of insurability, such as medical exams or health documentation. This feature is particularly valuable for individuals who may develop health issues during the initial term, as it ensures continued access to life insurance coverage despite any changes in their health status. The other options do not accurately describe the primary benefit of a Renewable Term policy. For instance, while premiums may vary upon renewal based on the policyholder's age at the time of renewal, they are not guaranteed to be lower. Lifetime coverage is not a feature of renewable term insurance; instead, such policies have a set term after which they must be renewed or converted to a different type of policy. Furthermore, Renewable Term policies do not accumulate cash value, which distinguishes them from whole life policies that offer this benefit.