The correct answer is 10 Year Convertible Term. A 10 Year Convertible Term life insurance policy is the type of term life policy that most likely contains a renewability feature. Here’s a detailed explanation of why this answer is correct and why the other options are not:

10 Year Convertible Term:

A 10 Year Convertible Term life insurance policy is a type of term life insurance policy that offers a fixed premium and death benefit for a period of 10 years. One of its key features is the ability to convert the policy into a permanent life insurance policy during the conversion period (usually without the need for a medical exam).

This conversion option is valuable because it allows the policyholder to change their term policy into a permanent one, such as whole life or universal life, which offers lifelong coverage.

Renewability Feature:

While the primary focus of a term life policy is to provide coverage for a specific term, most term policies, including 10 Year Convertible Term, contain a renewability feature. This feature allows the policyholder to renew the policy at the end of the term without the need for a medical exam or providing evidence of insurability.

In the case of a 10 Year Convertible Term policy, at the end of the initial 10-year term, the policyholder has the option to renew the policy for another term, typically at a higher premium due to the increased age of the insured.

The renewability feature ensures that the policyholder can continue to have life insurance coverage even if their needs have changed, or they are unable to obtain a new policy due to health reasons.

Why the other options are not correct:

a) Increasing Term:

Increasing Term life insurance policies provide a death benefit that increases over the term of the policy. While this type of policy offers the advantage of rising coverage to keep pace with inflation or increasing financial needs, it does not typically contain a renewability feature.

Increasing Term policies are designed to provide increasing protection during the term, and they may not be available for renewal without re-underwriting or obtaining a new policy.

b) Decreasing Term:

Decreasing Term life insurance policies offer a death benefit that decreases over the term of the policy. These policies are often used to cover specific financial obligations, such as a mortgage, where the outstanding balance decreases over time.

While these policies may be cost-effective, they do not usually include a renewability feature. The death benefit decreases according to a predetermined schedule, making it less likely that policyholders would want to renew for the same purpose.

c) Variable Term:

Variable Term life insurance policies are a type of term insurance that allows the policyholder to invest the premiums in investment accounts, such as mutual funds. The death benefit can vary based on the performance of the investments.

While variable term policies may offer investment opportunities, they do not typically include a renewability feature. The focus of variable term policies is on providing both life insurance coverage and investment options, and renewability is not their primary feature.

In conclusion, the correct answer is 10 Year Convertible Term because this type of term life insurance policy most likely contains a renewability feature. The renewability feature allows the policyholder to renew the policy at the end of the initial term without the need for medical underwriting, ensuring continued coverage even if their circumstances change.

It’s important to understand the terms and features of a life insurance policy when selecting the most suitable option based on your specific needs and goals. Renewability can be a valuable feature for those who want to maintain coverage into the future, especially when their health might have changed since the policy’s inception.