Renewability Provision
A term policy feature guaranteeing the insured may renew coverage for another term without evidence of insurability, with premium recalculated at the attained age.
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Practice This Concept
Which statement correctly describes a cancellable disability insurance policy?
The insurer may terminate the policy during the policy period, typically with advance notice, for any reason it chooses — A cancellable policy is the least protective renewability provision: the insurer may cancel coverage at any time during the policy period, usually upon written notice, for almost any reason. The insured gets coverage only for as long as the insurer chooses to keep the policy in force, so these policies are rarely used today for long-term protection. Renewability provisions form a spectrum from cancellable (weakest) to optionally renewable, conditionally renewable, guaranteed renewable, and noncancelable (strongest). This grading is part of the renewability terminology under the general concepts of medical and disability insurance (AH-II.2). The defining trait is the insurer's unrestricted mid-term right to terminate, subject only to notice and refund of unearned premium.
National insurance concept
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