Richard owns an insurance policy that is renewable only at the option of the insurance company. His policy is considered to be:

The policy Richard owns is categorized as optionally renewable because the right to renew the policy lies exclusively with the insurance company. This means that while Richard can seek renewal at the end of the policy term, it is ultimately up to the insurer to decide whether or not to grant that renewal. If the insurer chooses not to renew, Richard has no recourse to force renewal, thus distinguishing this type of policy from guaranteed renewable policies, which must be renewed as long as premiums are paid.

In an optionally renewable policy, conditions may exist where renewal could be denied, but this option is distinctly different from other classifications like cancelable or guaranteed renewable. In a cancelable policy, the insurer has the right to cancel at any time, which would not necessarily apply if Richard's policy is simply under the option of renewing it. A conditionally renewable policy would allow for certain conditions to be met to renew, further indicating that the insurer retains some discretion regarding renewal. Hence, Richard's policy aligns best with the characteristics of an optionally renewable policy.