How does renewability benefit a term life insurance policyholder?

Renewability is a significant feature of term life insurance policies that provides valuable advantages to policyholders. When a term life insurance policy is renewable, it means the policyholder has the option to renew the policy for an additional term without needing to undergo medical underwriting again.

This feature is particularly beneficial because, as individuals age or if their health deteriorates, obtaining new life insurance coverage can become more difficult or expensive. Renewability ensures that even if a policyholder's health status changes, they can continue their coverage without facing the potential challenges of re-qualification.

The other options do not accurately reflect the essence of renewability. A one-time extension of the policy may imply limitations that aren’t applicable to renewability terms, which could allow for multiple renewals. Increasing the death benefit automatically is not a function of renewability; benefits typically remain level unless specified otherwise in the policy. Lastly, renewability does not inherently lead to reduced premium costs; in fact, premiums may increase upon renewal based on the age of the policyholder. Therefore, the key benefit of renewability is the ability to secure continued coverage without medical scrutiny, making it a crucial aspect for many policyholders.