Health Insurance Renewal Rights

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Questions and Answers

What is a key feature of a guaranteed renewable policy?

The insurer cannot raise premiums at all.

The insurer can increase premiums on a class basis only. (correct)

The insured has the unilateral right to cancel anytime.

The insurer may increase premiums on an individual basis.

At what age is coverage generally not renewable under a guaranteed renewable policy?

Age 75

Age 70

Age 60

Age 65 (correct)

Which type of policies must be written as guaranteed renewable contracts?

Home insurance policies

Medicare Supplements and long-term care policies (correct)

Auto insurance policies

Annuity contracts

Under a guaranteed renewable policy, what is required for the insurer to continue coverage?

The premiums must be paid. Signup and view all the answers

How does a guaranteed renewable policy differ from a noncancellable policy?

It allows premium increases on the policy anniversary date. Signup and view all the answers

What must an insurer do when canceling a cancellable policy?

Give written notice and refund unearned premiums Signup and view all the answers

Under what condition must an insurer continue to honor a claim when canceling a policy?

If there is an open claim at the time of cancellation Signup and view all the answers

Which statement accurately describes the guaranteed renewable provision?

The insurer can increase premiums on a class basis. Signup and view all the answers

What is a limitation of guaranteed renewable policies?

Coverage is only guaranteed until age 65. Signup and view all the answers

What type of insurance policies must always be written as guaranteed renewable contracts?

Medicare Supplements and long-term care policies Signup and view all the answers

Which of the following statements about cancellable policies is true?

The insurer has the right to cancel at any time or at the end of the policy period. Signup and view all the answers

What must be clearly stated on the face page of an individual health insurance contract?

Conditions under which the policy may be renewed Signup and view all the answers

Which statement is true about noncancellable insurance policies?

Premiums can only be increased as stated in the original contract. Signup and view all the answers

What happens when a noncancellable policyholder reaches age 65?

The policy will not be renewed unless they provide evidence of employment. Signup and view all the answers

What is required of insurers if they intend not to renew a policy?

They must send written notice to the policyholder's last known address. Signup and view all the answers

What can be inferred about policies that lack a cancellation provision?

They still may not guarantee renewal of the policy. Signup and view all the answers

For disability income insurance, what condition must be met for policy renewal after age 65?

The insured must provide proof of continuing full-time employment. Signup and view all the answers

What key aspect should be examined in each health insurance policy?

The renewal provisions contained within the contract. Signup and view all the answers

What is a common misconception regarding cancellation provisions in health insurance policies?

They always guarantee the policy will be renewed. Signup and view all the answers

Study Notes

Rights of Renewability

Individual health insurance contracts must clearly state renewal conditions on the face page.
If an insurer intends to refuse renewal, a written notice must be sent to the policyholder’s last known address.
Absence of a cancellation provision does not ensure continuing coverage; insurers may still refuse renewal.
Review insurance policies carefully to understand renewal provisions, as they are crucial.

Noncancellable

Insurer cannot cancel a noncancellable policy or increase premiums beyond what is stipulated.
Policyholders have the right to renew for the duration of the contract without premium hikes.
Renewal guarantee typically lasts until the insured turns 65, after which they may qualify for Medicare.
For disability income insurance, renewal past age 65 requires proof of full-time employment.

Cancellable

Insurers can cancel these policies anytime or at the end of the policy period.
No obligation exists to continue coverage beyond the initial term.
Written notice of cancellation and a refund of unearned premiums must be provided to the insured.
Any open claims at the time of cancellation must still be honored by the insurer.
Cancellable policies are rare and often illegal in many states.

Guaranteed Renewable

Allows the insured to renew the policy for its life, similar to a noncancellable policy.
Insurers may increase premiums on the policy’s anniversary, but only on a class basis, not individually.
Coverage is generally guaranteed only until age 65.
Medicare Supplements and long-term care policies must be guaranteed renewable; they cannot be cancelled when the insured reaches age 65.

Additional Notes

Guaranteed renewable policies require insurers to maintain coverage if premiums are paid.
Premium increases are allowed on a class basis in guaranteed renewable policies.
Coverage under guaranteed renewable provisions typically ceases at age 65, similar to noncancellable policies.

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Description

This quiz explores the rights of renewability in individual health insurance contracts, highlighting the conditions under which policies may be renewed or non-renewed. Understand the responsibilities of insurers in notifying policyholders regarding renewal statuses and the implications of the specified term coverage. Test your knowledge on these crucial aspects of health insurance.