What does it mean if an insurance policy is considered "renewable"?

A policy being labeled as "renewable" indicates that the insured has the option to continue the coverage after its initial term without the need for re-evaluating their insurability. This is particularly significant as it provides continuity of coverage for the policyholder, ensuring that they can maintain their insurance even if their health status changes during the renewal period. This feature is particularly attractive to individuals who may develop health issues that could make it difficult to obtain new coverage or lead to higher premiums.

The other choices do not accurately describe the concept of renewability. A policy that remains unchanged for the insured’s life refers to a different type of policy, typically whole life insurance, which does not necessarily allow for renewability. Automatic conversion to permanent coverage would pertain to specific types of term policies but does not define the renewability feature. Lastly, the idea of guaranteeing lower premiums during renewal is not a standard characteristic of renewable policies, which means premiums can actually increase based on factors like the insured's age or risk profile.