What does the term "nonrenewal" indicate in insurance policy context?

In the context of insurance policy terminology, "nonrenewal" specifically refers to the situation where the insurer decides not to extend the coverage of a policy for an additional term once the current term expires. This means that when the policy reaches its renewal date, the insurer will not continue the policy under the same terms or at all. Nonrenewal can happen for various reasons, such as changes in the risk profile of the insured, claims history, or other underwriting considerations.

The other choices you mentioned each pertain to different scenarios within an insurance context. A late payment typically leads to a lapse in coverage rather than a nonrenewal. If the insured has requested termination, that is an individual action taken by the policyholder, contrasting with nonrenewal, which is initiated by the insurer. Modifications to a policy deal with changes in the terms and conditions of an existing agreement rather than indicating an end to coverage, as is the case with nonrenewal. Thus, the definition of nonrenewal aligns precisely with the answer indicating that the insurer will not continue the policy for another term.