Health · Chapter 18 · Renewability
Cancelable Policy
Definition
The least favorable class (and cheapest premium): either party may terminate, and the insurer may cancel AT ANY TIME with written notice and a refund of unearned premium — for example, because the insured filed too many claims. The insured can always cancel any policy by written notice.
Exam tip
Favorability ladder (best → worst for the insured): Noncancelable → Guaranteed → Conditionally → Optionally → Nonrenewable/Period → Cancelable. Premium cost falls as you descend.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms