Guaranteed Renewable

Guaranteed renewable is a feature in an insurance policy that requires the insurance company to renew the insurance policy for a specific period or continue coverage regardless of the changes to the health conditions of the policyholder provided that the insurance premiums are paid on the policy in a timely manner and according to their policy requirements. For example, you are enrolled in a term life insurance with guaranteed renewable of 10 years, even if you developed an illness your insurance policy will not be terminated just as long as you pay the premiums on time. The insurance company cannot also change the provisions in the policy contract without your consent as long as you pay the insurance premiums on time and cannot raise the premiums based on your health status.

In guaranteed renewable, the policy cannot be canceled based on the change of the health status of the insured. This necessarily means that if you already have this policy and you acquired or developed a serious disease after a few years, your insurance company can in no way rescind your policy contract after the diagnosis. However, your insurance policy may be contested and canceled based on fraud or misrepresentation of relevant information during application and within two years from the effectivity of the insurance policy. If you lied during the application of the insurance policy and you stated in the contract that you don’t smoke even if you really do, and later on you are diagnosed for lung cancer, your insurance policy will be canceled. The policy will be terminated basically not on the basis of your present health condition but on the basis of nondisclosure of relevant information required in the insurance policy application. Insurance companies may impose increase in guaranteed renewable policy rates for clustered group of people. Insurance companies can change or increase your rates not on the basis of your health conditions because they cannot make changes on individual basis but on changing the rates for everyone in a group or whole class of policyholders you belong to. If for instance, you applied and qualified for a ten years term insurance policy, guaranteed renewal is effective and can guarantee full protection only throughout the whole length of 10 years. It can only be renewed after the term expires. This policy feature or option is most applicable to term life insurance coverage and is designed to last for set number of years commonly 10, 20 and 30 years.

Guaranteed renewable as mentioned can be renewed after the term ends and showing evidence for insurability or proof of good health is not required. For example after 20 years the term expires, you are allowed to renew the policy contract and be guaranteed with the same level of financial protection without being required to show the general status of your health.

Guaranteed renewable life insurance policy is a policy option which can be advantageous to the beneficiaries. This policy option is provides coverage for funeral expenses and extra funds for the family or loved ones of the insured.