DEFINITION of 'Guaranteed Renewable Policy'
An insurance policy feature that obligates the insurer to continue coverage as long as premiums are paid on the policy. While re-insurability is guaranteed, premiums can rise based on the filing of a claim, injury, or other factor that could increase the risk of future claims.
Premiums can also be raised on an entire class of insured people during the life of a guaranteed renewable policy for health, life or disability insurance.
BREAKING DOWN 'Guaranteed Renewable Policy'
Most insurers offer both guaranteed renewable policies and non-cancelable policies. If premiums are similar for both a guaranteed and a non-cancelable policy, the non-cancelable policy will offer the double guarantee of re-insurability and locked-in premiums.