Health · Chapter 18 · Renewability
Guaranteed Renewable Policy
Definition
The insurer cannot terminate or change benefits/terms while premiums are paid on time — but it CAN raise premiums, only on an entire CLASS of policies, never on one individual. Used by individual disability income, long-term care, and Medicare Supplement policies.
Example
A disability insurer may raise rates on ALL truck-driver policies after class-wide morbidity worsens — but not on one driver because he filed a claim.
Exam tip
⚠️ #1 renewability trap: guaranteed renewable = renewal guaranteed, premium NOT guaranteed (class increases allowed).
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