In insurance a policy is issued for a specific term, which can be for a year or two, or even longer depending on the type of insurance policy. Once the term of the policy expires, the policyholder has the option to renew the policy, which involves paying the premium in full for the new term.
During the renewal process, the insurance company reviews the policy and the policyholder's claims history to determine if there are any changes in the policy terms or premium rates. Depending on the insurance policy and company's practices, the renewal process may be automatic, or the policyholder may need to actively renew the policy by filling out a form and submitting the premium payment.
Renewing an insurance policy is crucial to ensure that the policy remains in force, and the policyholder continues to receive coverage for the specified risks. It's important to note that the premium rates may change at the time of renewal, and the policyholder should review the new premium rates and policy terms before renewing the policy.
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