Which term describes the automatic continuation of coverage?

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Prepare for the Louisiana Series 103 Insurance Exam with study tools, flashcards, and multiple-choice questions. Ensure you are ready for this essential licensure test by understanding the exam format and gaining essential knowledge for life, health, and accident insurance.

Multiple Choice

Which term describes the automatic continuation of coverage?

Explanation:
Automatic continuation of coverage is renewal. When a policy term ends, renewal allows the coverage to continue into a new term under the same contract terms, typically without new underwriting, as long as the premium is paid. This prevents a gap in protection. By contrast, an extension is usually a temporary prolongation that may require agreement or different terms; a lapse means the policy ends due to nonpayment or nonrenewal; cancellation ends the policy entirely. So the best fit for automatic continuation is renewal.

Automatic continuation of coverage is renewal. When a policy term ends, renewal allows the coverage to continue into a new term under the same contract terms, typically without new underwriting, as long as the premium is paid. This prevents a gap in protection. By contrast, an extension is usually a temporary prolongation that may require agreement or different terms; a lapse means the policy ends due to nonpayment or nonrenewal; cancellation ends the policy entirely. So the best fit for automatic continuation is renewal.

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