Guaranteed Renewable Policy

AAA

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.

INVESTOPEDIA EXPLAINS '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.

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