State RegulationsMI specificDifficulty 1/5
Which description accurately characterizes a guaranteed renewable individual accident and health policy under Michigan's renewability classifications?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
In the renewability classifications Michigan recognizes under provisions including M.C.L. 500.2213b, guaranteed renewable means the insurer forgoes the right to cancel or decline renewal so long as the insured keeps paying premiums, but it retains the right to adjust premiums upward on a class-wide basis. This gives the insured durable access to coverage while acknowledging that the insurer may reprice risk for a whole group of similar policyholders at once.
Why the other options are wrong
- B) Locking the premium describes noncancelable coverage, not guaranteed renewable coverage.
- C) Renewal contingent on stated conditions is the conditionally renewable classification.
- D) Discretionary renewal at each period end describes renewable at the insurer's option, which offers the insured the least protection.
Memory hook
Guaranteed renewable: they can't drop you, but the whole class's price can climb.