Question

Explain the following renewal provisions that may appear in individual health insurance policies:

Guaranteed renewable

Noncancelable Conditionally renewable

Nonrenewable Guaranteed issue

Answer 1

Ans) Guarantee Renewal: A guaranteed renewable policy is an insurance policy feature that allows the insurer to continue coverage as long as premiums are paid on the policy. While re-insurability is guaranteed, premiums can rise based on the filing of a claim, injury, or other factors that could increase the risk of future claims. Premiums can also be raised on an entire class of insured people during the life of a guaranteed renewable policy for health, life or disability insurance.

Non Cancellable Conditionally Renewal: The least beneficial to the policyholder is a conditionally renewable policy as it offers virtually no actual guarantee of renewability. The insurance company can change the conditions of your policy every year, if they choose.

Non Renewable Guaranteed Issue: It indicates there will be no change in your premium schedule, and your monthly benefits or your policy benefits up to age 65 (or another specified age).

This type of policy is notable when it comes to disability insurance. Since many people don't have a guarantee that their income will never go down again, under this  policy, even if your income goes down later in life,or you are totally disabled, the company will pay you the total disability benefit you originally placed in-force. These policies cost a bit more as compared to guaranteed renewable policy.