Definition - What does Guaranteed Renewable mean?
Guaranteed renewable policy refers to a feature in the insurance contract that compels the insurance company to cover the policyholder regardless of the status of his or her health. The insurer raising the premium is the only modification that is allowed.
Insuranceopedia explains Guaranteed Renewable
This insurance feature is often included in health, life, and disability insurance policies. Coverage and renewal of coverage are ensured if this feature is in the contract. All the policyholder has to do is to pay his or her premiums promptly for risks to be covered.
The insurance company can raise the premium of the policy but not on an individual policy but on one whole class of policy. Most often, when a company has to raise the premium, it has to present its argument to the regulatory board of a state and only when granted is it legally able to do so.
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