Question

Please, Discuss the three main types of disability policies (Cancellable, Guaranteed Renewable, and Non-Cancelled Renewable)

Answer 1

A. Guaranteed renewable policies; are policies that cannot be canceled or changed, but the premiums may be changed by the insurer. Premium increases or decreases are based on a entire block or a group as whole. The premium changes cannot be applied to selected individuals.
A guaranteed renewable policy is an insurance policy feature that obligates the insurer to continue coverage as long as premiums are paid on the policy. While re-insurability is guaranteed, premiums can rise based on the filing of a claim, injury, or other factors that could increase the risk of future claims. Premiums can also be raised on an entire class of insured people during the life of a guaranteed renewable policy for health, life or disability insurance.

B. Non-cancelable: Non-cancelable policies are disability policies that cannot be canceled or changed, nor can the premiums be increased for the life of the policy. The only person who can adjust a non-cancelable disability policy is the insured.
A noncancellable insurance policy is a life or disability insurance policy that an insurance company can’t cancel, increase the premiums on or reduce the benefits of as long as the customer pays the premiums. Noncancellable insurance policies give the policyholder peace of mind that the cost, amount of coverage and term are known and that they won’t have to re-qualify for the policy at some point in the future when their health might not be as good and insurance might be harder to get.

C. Cancelable: Cancelable policies mean the insurer may take action that results in policy changes, premium changes, or cancellation of coverage, but only for the entire block of business or group as a whole. These changes cannot be applied to selective individuals

Before canceling an insurance policy, the insured party must make sure that he or she has replacement insurance coverage that is already confirmed. If there is no replacement coverage, the insured party can go completely uncovered for a period of time. One good reason for making certain of replacement coverage is that the insured party could face a situation in which certain medical conditions that developed during the prior health insurance coverage are excluded from coverage under the new insurance as "preexisting conditions." This is why it is essential to thoroughly research a new policy before the old one is canceled