A Peek at Guaranteed Renewable Policies

A guaranteed renewable policy is defined as an insurance policy feature that obligates the insurer to continue coverage as long as premiums are paid on the policy. What this means is that an insurance company has no choice but to renew the policy.

This type of insurance policy is very attractive when it comes to health insurance because insurance companies tend to refuse to renew coverage when people become classified as high risk (i.e. those that get sick regularly or get dreaded conditions). With a guaranteed renewable policy, insurance coverage will continue even if you grow older and eventually have lots of health problems.

The downside to guaranteed renewable policies is that the premiums can rise from year to year. They can rise simply because of the length of time you have been insured or because of the use of many services. Insurance companies do this to discourage people from renewing coverage. In the end though, even with a rising premium a guaranteed renewable policy may be worth it for certain individuals.