Which statement about a Guaranteed Renewable Health Insurance policy is correct?

Which statement about a Guaranteed Renewable Health Insurance policy is correct?

• A. Premiums decrease at the time of renewal
• B. Premiums remain the same regardless of age
• C. Premiums normally increase at the time of renewal
• D. Benefits cannot be altered by the insurer

Answer: (C)

In a Guaranteed Renewable Health Insurance policy, the insurer guarantees that the policyholder can renew the policy each year without the need for requalification, which provides a level of security for the insured. However, while the policy must be renewed, the premiums can increase at the time of renewal based on certain factors such as the policyholder's age, changes in the insurance market, or alterations in the claims experience. This means that even though the policy is guaranteed to be renewable, the cost of the premiums may typically rise as the insured gets older or as the overall risk pool changes. This feature of guaranteed renewability allows insurers to adjust premiums to reflect the increased risk associated with an aging population and the economic factors influencing healthcare costs, making option C the correct choice. It's important to understand this dynamic to recognize how coverage and costs can evolve throughout the life of the policy.

In a Guaranteed Renewable Health Insurance policy, the insurer guarantees that the policyholder can renew the policy each year without the need for requalification, which provides a level of security for the insured. However, while the policy must be renewed, the premiums can increase at the time of renewal based on certain factors such as the policyholder's age, changes in the insurance market, or alterations in the claims experience. This means that even though the policy is guaranteed to be renewable, the cost of the premiums may typically rise as the insured gets older or as the overall risk pool changes.

This feature of guaranteed renewability allows insurers to adjust premiums to reflect the increased risk associated with an aging population and the economic factors influencing healthcare costs, making option C the correct choice. It's important to understand this dynamic to recognize how coverage and costs can evolve throughout the life of the policy.