Final answer:
The incorrect statement about renewable term life insurance is that it offers a cash value component. This type of policy provides coverage for a specific term, can be renewed without a medical exam, and premiums increase with renewal, but it does not accumulate cash value like whole or universal life policies do.
Step-by-step explanation:
Jamie has a renewable term policy, which is a type of life insurance. Among the statements provided, the one that is not incorrect is that it provides coverage for a specific term. A renewable term policy is indeed designed to cover the insured for a predetermined period, or "term." Once the term ends, the policy can be renewed for another term without a medical exam, although the premiums typically increase with each renewal as the insured's age, and potentially health risks, increase.
However, the statement regarding a cash value component is incorrect for a renewable term policy. Unlike whole life or universal life policies, term insurance does not have an investment or savings component; it does not accumulate cash value over time. Its primary function is to provide a death benefit to the policyholder's beneficiaries if the policyholder dies during the term of the policy.