Ten years ago, Anastasia purchased a $125,000 10-year term renewable life insurance policy. Her insurance need has not changed, and she is still in good health. She asks her insurance agent Raphael what she should do.

Ten years ago, Anastasia purchased a $125,000 10-year term renewable life insurance policy. Her insurance need has not changed, and she is still in good health. She asks her insurance agent Raphael what she should do.
A . Renew her current policy at the same rate.
B . Renew the policy at an increased rate.
C . Renew her policy and restart the incontestability period.
D . Shop around for a better rate.

View Answer

Answer: B

Explanation:

Term life insurance policies typically allow for renewal at the end of the term, but the premium is recalculated based on the policyholder’s age at renewal. Since Anastasia’s policy is a 10-year term, and she is now renewing it, her premiums will be higher due to her increased age, despite her good health. The policy will renew without medical underwriting, but it will be at an increased rate.

Option A is incorrect, as the rate cannot remain the same.

Option C, restarting the incontestability period, may happen but is unrelated to the premium question.

Option D, shopping for a better rate, is an option but not directly tied to renewal.

Therefore, Option B is correct​.