Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Health InsuranceEasy
A Florida resident is reviewing their existing health insurance policy and notices a clause stating that the insurer can unilaterally change the policy's premium rates with sufficient notice. Which type of policy provision allows an insurer this flexibility?
- AGuaranteed Renewable
- BNoncancellable
- CConditionally Renewable
- DOptionally Renewable
Show answer & explanationAnswer & explanation
Correct answer: A. Guaranteed Renewable
A Guaranteed Renewable policy provision allows the insurer to increase premiums on a class basis, but not cancel the policy. The insurer must provide notice before increasing rates.
Why the other options are wrong
- B. Noncancellable policies guarantee renewability and the premium remains the same for the life of the policy.
- C. Conditionally Renewable policies allow the insurer to refuse renewal under certain conditions specified in the policy.
- D. Optionally Renewable policies allow the insurer to refuse renewal for any reason on the premium due date or policy anniversary date.
Guaranteed Renewable Provision
A health insurance policy provision that guarantees the insured's right to renew the policy, but allows the insurer to increase premiums for an entire class of policyholders.
- Insured cannot be canceled due to health
- Insurer can raise premiums by class
- Common in long-term care and Medicare Supplement policies
Memory trick: GRanted Renewability allows Rates to Rise, but NO Cancellation.