Question

Which of the following is not a feature of a guaranteed renewable provision?

a) Renewal of the policy at the insured's discretion
b) Premiums that cannot be increased
c) Guaranteed coverage renewal by the insurance company
d) Automatic termination after a specified period

Answer 1

The feature not associated with a guaranteed renewable provision is the idea that premiums cannot be increased.

Step-by-step explanation:

Among the options provided, the one that is not a feature of a guaranteed renewable provision is b) Premiums that cannot be increased. While a guaranteed renewable insurance policy allows the insured to renew the policy and guarantees that the insurer will not refuse renewal, it typically does not guarantee that the premiums will remain the same. Insurance companies often reserve the right to increase premiums for the entire class of insurance policies but not based on an individual’s specific circumstances.

Instead, the characteristic that is not associated with these provisions is d) Automatic termination after a specified period, as the essence of guaranteed renewable is to allow the policy to continue as long as the premiums are paid.