Cancelable Insurance

AAA

DEFINITION of 'Cancelable Insurance'

This is insurance that may be canceled, at any time, by the insured party or by the insurance company. Aside from life insurance, most insurance policies can easily be. If the insurer cancels the policy, it must first give notice and must also refund prepaid premium on a pro rata basis.

INVESTOPEDIA EXPLAINS 'Cancelable Insurance'

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.

RELATED TERMS
  1. Cancellation Provision Clause

    It is a provision in an insurance policy that permits an insurer ...
  2. Pro-Rata

    Used to describe a proportionate allocation. A method of assigning ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. Policyholder Surplus

    The assets of a mutual insurance company minus its liabilities. ...
  5. Insurance Coverage Area

    The geographic region in which an insurance policy’s benefits ...
  6. Commercial Insurance Lines

    Commercial insurance lines help keep the economy running smoothly ...
Related Articles
  1. Insurance Tips For Homeowners
    Insurance

    Insurance Tips For Homeowners

  2. Preparing Your Finances From Natural ...
    Home & Auto

    Preparing Your Finances From Natural ...

  3. Permanent Life Policies: Whole Vs. Universal
    Options & Futures

    Permanent Life Policies: Whole Vs. Universal

  4. Life Insurance: How To Get the Most ...
    Retirement

    Life Insurance: How To Get the Most ...

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center