Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insured has an individual health policy that is guaranteed renewable. Which statement about the insurer's rights is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under a guaranteed renewable policy, the insurer must renew coverage as long as premiums are paid and may not cancel because the insured's health deteriorates. The insurer may, however, increase premiums by class — applying an increase to all policies in the same class — but may not single out an individual based on personal claims. Cancellation remains possible only for defined causes such as nonpayment of premium or fraud. This is what separates guaranteed renewable coverage from a noncancelable policy.
Why the other options are wrong
- B) Cancelling for any reason is the hallmark of a cancellable or optionally renewable policy, not a guaranteed renewable one.
- C) Raising one insured's premium because of personal claims is prohibited; rate increases must apply to the entire class.
- D) The insurer may change premiums by class; a fixed lifetime premium guarantee is the noncancelable feature.
Memory hook
Guaranteed renewable: can't be canceled for health, but the class premium can climb.