Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceMedium
A client is reviewing their health insurance policy and notices a provision that states the insurer cannot unilaterally change any policy provision, nor can they increase the premium. This provision guarantees the policy will remain in force as long as the premiums are paid. Which type of renewability provision does this describe?
- AGuaranteed Renewable
- BConditionally Renewable
- CNon-Cancellable
- DOptionally Renewable
Show answer & explanationAnswer & explanation
Correct answer: C. Non-Cancellable
A Non-Cancellable provision ensures that the insurer cannot cancel the policy or increase premiums as long as the policyholder pays the premiums. This provides the highest level of guarantee to the insured.
Why the other options are wrong
- A. Guaranteed Renewable allows the insurer to increase premiums by class, but not cancel the policy.
- B. Conditionally Renewable allows the insurer to refuse renewal under certain conditions specified in the policy.
- D. Optionally Renewable allows the insurer to refuse renewal for any reason on the policy anniversary.
Non-Cancellable Provision
A health insurance policy provision that guarantees the insurer cannot cancel the policy or increase its premium rates for as long as the policy is in force, provided the policyholder pays the premiums.
- Highest level of renewability guarantee.
- Insurer cannot change policy provisions.
- Insurer cannot increase premiums.
Memory trick: Always Secure, Never Cancelled, Never More Expensive.