CARD Q079
Which policy provision generally protects both renewability and the premium rate during its stated guarantee period?
- Noncancelable
- Conditionally renewable
- Guaranteed renewable only
- Optionally renewable
Noncancelable
Noncancelable coverage generally prevents cancellation and premium increases while required premiums are paid during the guarantee period. Guaranteed renewable may allow class-wide rate changes.
Why each choice is right or wrong
A. Noncancelable
Correct. Noncancelable coverage generally prevents cancellation and premium increases while required premiums are paid during the guarantee period. Guaranteed renewable may allow class-wide rate changes.
B. Conditionally renewable
Incorrect. Conditional renewability permits nonrenewal under specified conditions.
C. Guaranteed renewable only
Incorrect. Guaranteed renewable generally permits qualifying class-wide premium changes.
D. Optionally renewable
Incorrect. Optional renewability gives the insurer more renewal discretion.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.