Guaranteed Renewable
In the context of insurance, Guaranteed Renewable refers to a policy feature ensuring that the insurer cannot cancel the policy as long as the policyholder continues to pay premiums on time. While the coverage terms cannot be altered, the insurer retains the right to adjust premiums, but only for an entire class of policyholders, not on an individual basis.
Key aspects of Guaranteed Renewable include:
- Guaranteed Continuation: Policy renewal is mandatory for the insurer if premiums are paid.
- Premium Adjustment: Rates can change for a group but not for an individual.
- Unaltered Coverage: Terms of coverage remain unchanged.
Comparison to Non-Cancellable: Unlike Guaranteed Renewable, a Non-Cancellable policy also guarantees that premiums cannot be increased, offering greater cost predictability but typically at a higher initial premium. Both provide long-term stability for the policyholder.
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