Question

Disability policies have many characteristics and provisions. Which of the following is correct regarding policies that are guaranteed renewable versus non-cancelable?

A)Non-cancelable prevent the insurance company from canceling the policy as long as the premiums are paid
B) Guaranteed renewable and non-cancelable disability policies often have policy increases
C) Guaranteed renewable and non-cancelable disability policies always provide protection for the insured until age 65
D) Guaranteed renewable policies can experience premium increases based on the health conditions of the insured

Answer 1

Non-cancelable policies prevent the insurance company from canceling the policy as long as the premiums are paid. Guaranteed renewable policies can experience premium increases based on the health conditions of the insured.

Step-by-step explanation:

Regarding disability policies, the correct statement is:

A) Non-cancelable policies prevent the insurance company from canceling the policy as long as the premiums are paid.

Guaranteed renewable policies, on the other hand, can be canceled by the insurance company, but the insured has the right to renew the policy each year as long as they continue to pay the premiums.

Guaranteed renewable policies may experience premium increases based on the health conditions of the insured.