Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Health InsuranceMedium
A Florida resident is reviewing their individual health insurance policy and notices a provision that states the insurer cannot cancel or refuse to renew the policy, except for nonpayment of premiums or misrepresentation. This provision is characteristic of which type of individual health policy?
- AOptionally Renewable
- BGuaranteed Renewable
- CConditionally Renewable
- DNoncancellable
Show answer & explanationAnswer & explanation
Correct answer: B. Guaranteed Renewable
A Guaranteed Renewable policy ensures that the insurer cannot cancel or refuse to renew the policy, except for nonpayment of premiums or misrepresentation. Premiums, however, can be increased by class.
Why the other options are wrong
- A. Optionally Renewable allows the insurer to refuse renewal for any reason.
- C. Conditionally Renewable allows the insurer to refuse renewal under specific conditions stated in the policy.
- D. Noncancellable policies guarantee renewal at the same premium, a higher level of guarantee than Guaranteed Renewable.
Guaranteed Renewable Policy
An individual health insurance policy type where the insurer guarantees renewal of the policy, but reserves the right to increase premiums on a class basis.
- Insurer cannot cancel or refuse to renew.
- Exceptions for nonpayment or misrepresentation.
- Premiums can be increased for an entire class of policyholders.
- Offers a strong level of security for the insured.
Memory trick: Renewing 'Guaranteed' means they can't say no, but the price might grow.