What type of policy transaction involves revising an existing policy?

The type of policy transaction that involves revising an existing policy is a change transaction. In the context of insurance, a change transaction allows policyholders to modify specific terms and conditions of their existing policies, such as updating coverage levels, changing beneficiaries, or altering deductibles.

This flexibility is crucial as it enables policyholders to adjust their coverage in response to changing personal circumstances or needs, ensuring that their insurance adequately reflects their current situation. A change transaction is generally initiated through a formal request from the policyholder and leads to an endorsement or amendment to the original policy.

In contrast, a renewal transaction pertains to the continuation of a policy for another term without the need for major modifications. Cancellation refers to the termination of a policy by either the insurer or the policyholder, while reinstatement involves bringing a lapsed policy back into force after it has been canceled or expired. Therefore, the nature of revising an existing policy aligns specifically with the definition of a change transaction.