Question

A policy issued on a non-cancellable basis means:

The insurer can cancel the policy at any time.
The insured can cancel the policy at any time.
The policy cannot be canceled by the insurer, and premiums remain fixed.
Premiums can be adjusted by the insurer at any time.

Answer 1

A policy issued on a non-cancellable basis means that the policy cannot be canceled by the insurer, and the premiums remain fixed.

Step-by-step explanation:

A policy issued on a non-cancellable basis means that the policy cannot be canceled by the insurer, and the premiums remain fixed. Non-cancellable policies provide stability and assurance for the insured, as they cannot be terminated unilaterally by the insurance company. This means that as long as the insured pays the premiums, the policy remains in force and cannot be canceled by the insurer.

New Jersey when auto insurance premiums were kept low, leading to several insurers withdrawing from the market. Additionally, in 2009 State Farm pulled out from selling property insurance in Florida due to regulatory decisions.

Insurance, as a financial tool, allows households and firms to distribute the risk of significant financial loss from unforeseen events. Premiums are the regular payments made to cover these risks, with the assurance of financial support when needed.