Final answer:
The answer to the question is C) The policy can be canceled by the insured at any time. Guaranteed renewable means the insurer cannot cancel the policy as long as the insured pays the premiums, but it does not fix the premium rates for life.
Step-by-step explanation:
An individual health insurance policy that is guaranteed renewable means that the insurer agrees to continue the policy as long as the premiums are paid. The correct answer to the question is C) The policy can be canceled by the insured at any time. This means that while the policyholder has the right to cancel the policy, the insurer must continue to provide coverage as long as the premiums are paid. It does not mean that the premiums will remain the same for the lifetime of the policy, as the insurer may increase premiums, but not on an individual basis rather for an entire class of similar policies.
Insurance is a method of protecting an individual from financial loss, with policyholders making regular payments to an insurance entity, which compensates members who incur financial damage from an event covered by the policy. However, when regulators impose rules to keep premiums low, insurance companies may avoid insuring high-risk parties or withdraw from certain markets to prevent losses.