Guaranteed Renewable
A policy provision that guarantees the insured's right to renew coverage regardless of health changes, though premiums may increase.
What is Guaranteed Renewable?
A guaranteed renewable policy is an insurance contract that gives the policyholder the contractual right to renew coverage each year without being subject to medical underwriting, meaning the insurer cannot cancel the policy or require the insured to requalify due to a health condition that developed after the policy was issued. However, the insurer may increase premiums for an entire class of policyholders (not singled out for individual increases). Guaranteed renewable is common in individual health and disability insurance policies and is stronger than conditionally renewable policies (which allow broader cancellation grounds) but weaker than non-cancelable policies (which lock in premiums).
Example
A 45-year-old buys a guaranteed renewable individual disability income policy. Three years later, they are diagnosed with a chronic condition. Because of the guaranteed renewable provision, the insurer must continue the policy without requiring a new health exam. The insurer may raise premiums for the entire class of policyholders but cannot single out this individual for a rate increase or cancellation.
Source: National Association of Insurance Commissioners — Disability Income Insurance