Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Health InsuranceHard
A Florida agent is explaining the renewability options for health insurance policies. A client asks about a policy that the insurer can cancel at any time, provided they give proper notice. Which type of renewability provision is this?
- AOptionally Renewable
- BGuaranteed Renewable
- CCancellable
- DConditionally Renewable
Show answer & explanationAnswer & explanation
Correct answer: C. Cancellable
A Cancellable policy provides the least protection to the insured. The insurer can cancel the policy at any time, for any reason, as long as they provide proper notice and refund any unearned premium. This differs from other types that offer more restrictions on the insurer's cancellation rights.
Why the other options are wrong
- A. Optionally Renewable policies allow the insurer to refuse renewal at the premium due date or policy anniversary, but not cancel mid-term.
- B. Guaranteed Renewable policies cannot be canceled by the insurer, though premiums can be raised by class.
- D. Conditionally Renewable policies can only be canceled if specific conditions outlined in the policy are met.
Cancellable Provision
A health insurance policy provision that allows the insurer to cancel the policy at any time for any reason, provided advance notice is given and any unearned premium is refunded.
- Least favorable to the insured
- Insurer can cancel mid-term
- Requires proper notice and premium refund
- Rare in modern individual health plans due to ACA
Memory trick: Renewability: From No-Cancel to Can-Cancel, know your rights.